Could 3M Company (NYSE:MMM) Be on the Radar of an Activist Investor?

Analyst Don Bilson of Gordon Haskett suggests that 3M Company (NYSE:MMM) could be on the radar of an activist investor. Bilson’s belief stems from the fact that financial services giant Morgan Stanley (NYSE:MS) purchased over 4.5 million shares of 3M Company in Q3, as per a 13F regulatory filing. 3M Company operates in the fields of industry, worker safety, U.S. health care, and consumer goods.f

Interestingly, Morgan Stanley acts as a prime broker for large institutional clients and may have purchased the shares on behalf of an activist investor. Bilson believes that an activist investor could pursue 3M to separate its consumer business from the industrial business.

3M Company has had its fair share of troubles in the past couple of years, from legal cases over defective earplugs sold to the military and PFAS fines (Per- and Polyfluorinated Substances) to dwindling financial performance. The company even plans to spin off its healthcare unit, to streamline operations. No wonder Bilson believes that 3M could be on the radar of an activist investor. Year to date, MMM stock has lost 25.4%.

Is MMM a Buy or Sell?

Looking at the hefty fines (roughly $25 billion to $30 billion) on the earplug lawsuits and the uncertainty of the business amid the macro woes, analysts have a Moderate Sell consensus rating on MMM stock. This is based on eight Hold and five Sell ratings during the past three months. On TipRanks, the average 3M Company stock prediction of $124.69 implies 3.2% downside potential to current levels. This suggests that analysts do not predict any near-term upside to the stock currently.

Having said that, 3M has a solid dividend track record, and due to its depressed stock price, the current dividend yield looks even more attractive. 3M pays a regular quarterly common dividend of $1.49 per share, reflecting a yield of 4.53%.

Disclosure