3M Stock Has Chart Support in Place as Earnings Loom

What investors can expect from 3M stock in 2021

Jan 22, 2021 at 10:04 AM
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3M Company (NYSE:MMM) will report  fourth-quarter earnings next week on Jan. 26 before the bell. The company is currently valued at $98.4 billion and has over $44 billion in total assets.

On the charts, MMM has carved out a channel of higher highs since its March 23 seven-year lows near $114. And while the shares have broken from this trendline to start 2021, their 160-day moving average has stepped up to support the pullback. 

MMM Stock Chart

3M has a history of muted post-earnings reactions. In the last eight reports, MMM has averaged a post-earnings move of 4.5%, regardless of direction. This time around, the options market is pricing in a similar 4.8% move for the stock.

Even with a volatile event such as earnings on the horizon, MMM sports attractively priced premium. The security's Schaeffer's Volatility Index (SVI) of 30% sits in the extremely low 13th percentile of its annual range. In simpler terms, options players are pricing in low volatility expectations at the moment.

Looking at the company's financials, MMM has maintained consistent annual revenue and net profit in recent years. 3M stock currently trades at a price-earnings ratio of 20.02 and has a forward price-earnings ratio of 17.54.

Overall, 3M is an ideal stock for dividend investors looking for minimal risk. Investors likely will not see much stock appreciation, but can look forward to one of the most secure dividend payouts in the U.S. stock market. 3M has paid dividends to its shareholders without interruption for more than 100 years, and has increased its annual dividend for 62 consecutive years. MMM has a forward dividend of $5.88 and dividend yield of 3.45%.

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