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- Stocks to Bounce in September: 3M
Stocks to Bounce in September: 3M
The share price of 3M Company soared by nearly 6.7% for the first two trading sessions of the week. The firm faced several lawsuits, including accusations of more than 260,000 U.S. soldiers on allegedly selling defective combat earplugs which caused hearing loss suffering. The company has agreed to pay $6 billion in damage to settle this vast set of lawsuits, as a widely anticipated sum of compensation was around $10-15 billion. It was interpreted as a positive move by shareholders from the financial point of view. It is worth noting that a similar price jump took place in June on a tentative $10.3 billion settlement in another lawsuit against 3M on water pollution. A component of the DJIA 30 (Dow Jones Industrial Average) index, 3M stock was seemingly doomed to the dull existence near its historical bottom, which was more than 80% below its peak value. Yet, it does somewhat better compared to its counterparts in the segment, as it at least maintained a stable and robust dividend yield of 5.8%. The market value of a conglomerate is above $58 billion. Though legal issues and high primary cost may continue to affect the company's reputation and financials, this second leap of its shares in summer may set in motion a slow and steady process of 3M price recovery during the nearest weeks. However, this road is uncertain, as 22 U.S. states are seeking to overturn the latest settlement on earplugs compensation. Again, the company probably needs to increase its debt to pay this money. 3M has rising gross profit and return on invested capital, yet a declining trend in operating margin and return on equity. Its sales growth was down to 5.8% YoY, mostly due to current challenges in the segment.
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