• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Industrials

Cramer: 3M Gives You Everything You Could Want From a Company

3M is an amazing company because it has been making crucial changes for years.
By JIM CRAMER
Jan 26, 2018 | 08:03 AM EST
Stocks quotes in this article: MMM

Nothing like a good clinic. 3M (MMM) puts on the best. Here's a company that the analysts struggle with, because the company's an R&D powerhouse, which makes it difficult to model.

In other words, there's so much that's new per quarter, that the organic growth kind of sneaks up on you.

Thursday's quarterly report gave you 6% organic growth. The standouts: the electronics and energy divisions, and the safety business.

A lot of the business came from Asia Pacific, which is something the analysts seem to discount. They are so focused on the Americas, they simply don't understand the pastiche of businesses and the notion that there is an R&D business, both locally and in St. Paul, that actually does create earnings much faster than any other company.

The statistic that matters: 30% of the sales come from products that didn't exist three years ago. How do you model that? How do you model all the new household products the company has -- Inge Thulin sends me a basket of new kinds of sponges and cleaning products and other innovations that would make a parent's day when you move, for example, your kid into a new apartment -- which is how I know them. It's the safety and graphics and electronic and energy businesses that are rally propelling things.

It's not just innovation. 3M gives you everything you could ever want from a company. While everyone is struggling with higher costs, the company reported that costs were lower. When so many are attempting -- and failing -- to put through price increases, 3M succeeded in a way that I think surprised analysts.

While many companies are trying to calculate what the new tax code means, 3M has figured it out. The company's tax rate goes from 26-27% to 20-22%. We know it is going to re-invest in the company, because re-investment is the lifeblood of the company. But the management are always committed to higher dividends and bigger buybacks. You got a 16% increase in the dividend, from $1.175 to $1.36, when all we thought we'd get was $1.24. Very few companies that are followed by so many analysts would surprise like that.

The buyback was boosted to $2 to $5 billion, from $2 to $4 billion previously. I bet it's the upper end of the range. Why? Because the share count here has gone from 732 million to 613 million over 10 years' time. I think the buyback gets increased in part because of the advance of the stock.

3M's an amazing company because it has been making these changes for years. My dad was the rep for Philadelphia, selling whatever 3M invented that could help him sell product to retailers for better packaging.

I used to go with Pop to his office on Saturdays. Retailers always run out of gift wrap and boxes they need to help sell their wares. He never stopped working on Saturdays, because he didn't want to disappoint. I remember one day when 3M came up with Shasheen, a ribbon that made it so retailers could make beautiful bows. It was so revolutionary that I dazzled kids in my fifth-grade class show and tell with the stuff.

If you were my father, you had a whole new product to make a call on in a business that was devoid of innovation. That was 55 years ago. You can go on eBay and see what he sold.

All I can say is that 3M is constantly giving the Pops of the world and the governments and the enterprises of all kinds new product to make a call or a sale on. It worked then. It worked now.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Industrials | Earnings | Markets | Consumer | How-to | Jim Cramer | Risk Management | Stocks

More from Industrials

Can Caterpillar's Candles Keep Climbing?

Bruce Kamich
Apr 9, 2021 10:43 AM EDT

Here's what CAT's charts are telling us.

Honeywell Charts Turn Mixed Following Stock Grinding Higher

Bruce Kamich
Apr 7, 2021 8:24 AM EDT

The near-term direction of the technology and manufacturing giant's shares isn't clear from its technical patterns.

Go Ahead, Call Cleveland-Cliffs' Bluff

Bruce Kamich
Apr 1, 2021 1:49 PM EDT

As the steel maker makes an upside breakout -- here's where traders should look to buy the dip.

Jim Cramer: Look Who's Steel-ing the Show

Jim Cramer
Mar 31, 2021 3:34 PM EDT

Here's why the institutional stewards of capital who are taking back control of the market are salivating over a dirty old iron company.

I'm Looking to Buy Manitowoc on a Pullback

Bruce Kamich
Mar 31, 2021 12:42 PM EDT

Here's my strategy on MTW shares.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • 11:18 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The 5 Pillars of Exceptional Trading
  • 08:05 AM EDT BOB LANG

    Bitcoin vs. Gold: Which Should You Invest In Now?

    Read my article TheStreet here!
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login