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3M Co. (MMM) | Common Stock Valuation Ratios (Price Multiples)

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Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).


Current Valuation Ratios

3M Co., current price multiples

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  3M Co. Industrials
Selected Financial Data
Current share price (P) $ 87.73  
No. shares of common stock outstanding 711,805,978  
Growth rate (g) 2.69%  
 
Earnings per share (EPS) $ 5.74  
Next year expected EPS $ 6.67  
Operating profit per share $ 8.31  
Sales per share $ 37.46  
Book value per share (BVPS) $ 22.00  
Ratios (Price Multiples)
Price to earnings (P/E) 15.29 18.58
Price to next year expected earnings 13.15 15.50
Price-earnings-growth (PEG) 5.68 1.54
Price to operating profit (P/OP) 10.55 12.99
Price to sales (P/S) 2.34 1.52
Price to book value (P/BV) 3.99 3.07

If company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.

Otherwise, if company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.

Historical Valuation Ratios (Summary)

3M Co., historical price multiples

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
Price to earnings (P/E) 16.09 17.94 9.51 13.81 14.51
Price to operating profit (P/OP) 11.11 11.90 6.31 9.14 9.81
Price to sales (P/S) 2.46 2.48 1.30 2.31 2.44
Price to book value (P/BV) 4.20 4.49 3.33 4.82 5.61
Ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. 3M Co.'s P/E ratio increased from 2008 to 2009 but then slightly declined from 2009 to 2010.
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts can may use price to operating profit. 3M Co.'s P/OP ratio increased from 2008 to 2009 but then slightly declined from 2009 to 2010.
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. 3M Co.'s P/S ratio increased from 2008 to 2009 but then slightly declined from 2009 to 2010.
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company's required rate of return and its actual rate of return. 3M Co.'s P/BV ratio increased from 2008 to 2009 but then slightly declined from 2009 to 2010.

Price to Earnings (P/E)

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  No. shares of common stock outstanding1 711,805,978 711,733,377 693,791,556 707,662,632 733,885,504
  Selected Financial Data (USD $)
Net income attributable to 3M (in millions) 4,085  3,193  3,460  4,096  3,851 
Earnings per share (EPS) 5.74 4.49 4.99 5.79 5.25
  Share price1, 2 92.33 80.47 47.42 79.95 76.12
  P/E Ratio, Comparison to Industry
3M Co. 16.09 17.94 9.51 13.81 14.51
  Industry, Industrials 19.09 19.02 8.18 17.74 –
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of 3M Co.'s Annual Report.
Ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. 3M Co.'s P/E ratio increased from 2008 to 2009 but then slightly declined from 2009 to 2010.

Price to Operating Profit (P/OP)

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  No. shares of common stock outstanding1 711,805,978 711,733,377 693,791,556 707,662,632 733,885,504
  Selected Financial Data (USD $)
Operating income (in millions) 5,918  4,814  5,218  6,193  5,696 
Operating profit per share 8.31 6.76 7.52 8.75 7.76
  Share price1, 2 92.33 80.47 47.42 79.95 76.12
  P/OP Ratio, Comparison to Industry
3M Co. 11.11 11.90 6.31 9.14 9.81
  Industry, Industrials 13.35 12.26 7.15 16.43 –
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of 3M Co.'s Annual Report.
Ratio Description The company
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts can may use price to operating profit. 3M Co.'s P/OP ratio increased from 2008 to 2009 but then slightly declined from 2009 to 2010.

Price to Sales (P/S)

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  No. shares of common stock outstanding1 711,805,978 711,733,377 693,791,556 707,662,632 733,885,504
  Selected Financial Data (USD $)
Net sales (in millions) 26,662  23,123  25,269  24,462  22,923 
Sales per share 37.46 32.49 36.42 34.57 31.24
  Share price1, 2 92.33 80.47 47.42 79.95 76.12
  P/S Ratio, Comparison to Industry
3M Co. 2.46 2.48 1.30 2.31 2.44
  Industry, Industrials 1.56 1.23 0.75 1.76 –
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of 3M Co.'s Annual Report.
Ratio Description The company
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. 3M Co.'s P/S ratio increased from 2008 to 2009 but then slightly declined from 2009 to 2010.

Price to Book Value (P/BV)

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  No. shares of common stock outstanding1 711,805,978 711,733,377 693,791,556 707,662,632 733,885,504
  Selected Financial Data (USD $)
3M Company shareholders’ equity (in millions) 15,663  12,764  9,879  11,747  9,959 
Book value per share (BVPS) 22.00 17.93 14.24 16.60 13.57
  Share price1, 2 92.33 80.47 47.42 79.95 76.12
  P/BV Ratio, Comparison to Industry
3M Co. 4.20 4.49 3.33 4.82 5.61
  Industry, Industrials 3.15 2.56 1.97 3.63 –
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of 3M Co.'s Annual Report.
Ratio Description The company
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company's required rate of return and its actual rate of return. 3M Co.'s P/BV ratio increased from 2008 to 2009 but then slightly declined from 2009 to 2010.

February 6, 2012

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