Diversified products manufacturer 3M Company (NYSE: MMM – $166.02) reported better-than-expected first-quarter results. St. Paul, Minnesota-based MMM posted earnings of $2.05 a share, on sales of $7.409 billion. Analysts on an average had expected the company to earn $1.92 per share, on sales of $7.326 billion. All told, share earnings were 5.4% better than the year-earlier tally of $1.85 per share, while sales slipped 3%. The top line continued to face strong headwinds, especially in the Electronics and Energy segment. Sales there declined 13.6%, offsetting advances from the Safety and Graphics and Health Care businesses. Elsewhere, Industrial sales were down 3%, while those at the Consumer unit were flat. Management left its financial outlook for 2016 virtually intact and calls for share earnings in the $8.10 to $8.45 range. It also maintained its expectation for 1% to 3% local organic sales growth. The company also said that it plans to spend more than $10 billion on acquisitions by 2020 in order to jumpstart growth.
The shares hold attractive investment qualities for conservative accounts, especially when viewed on a risk-adjusted basis. The above-average and well-covered dividend, yielding 2.64%, is secure and adds further appeal to 3M’s stock as there is room for the payout to grow.