The 3M Company (MMM) is undergoing a restructuring aimed at improving operational efficiency. The transition will take some time, but the company is ready to pay shareholders dividends even during this phase.
MMM is trading close to its 52-week highs at present. However when compared to the beginning of the year there is almost no development. The explanation for the slight stock rise is that in financial reports, the company has consistently struggled to reach its own estimates. The market and medical segments are projected to rise by 4-6 percent annually between 2016 and 2020, according to the forecast. Actual growth did, however, vary in a smaller direction from the projection.
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The management of 3M Company started reforming the business in response to many disappointing results. In particular two businesses have been acquired: m*Modal, a developer of systems with artificial intelligence components, and Acelity, a specialist in medical care. 3M Company sold its drug distribution business at the same time and is considering selling its food safety business for $3.5 billion, according to unconfirmed reports. 3M Company in particular, gets rid of market areas in which it does not compete entirely, but instead improves promising sectors, such as healthcare solutions.
A new operating model was also announced by 3M Company and its business was optimized in early 2020. A modern method of enterprise resource planning has been adopted, and corporate organizations will now operate on a global basis.
The transition has only just started, so it’s too early to worry about its success. Nonetheless, the technology company has some margin for error. The investment would be justified if the transition results in improved revenue and margins. Furthermore the firm remains a dividend payer, actually yielding 3.4 percent.
The 3M Company (MMM) stock was worth $172.46 at close of the trading on Tuesday.
