3M: A “Forever” Growth Stock
09/29/2014 7:00 am EST
Our latest featured company is a true "forever" growth stock that every single growth investor should own today, suggests Tyler Laundon in Daily Profit.
At any given time, conservative growth investors will have a hard time finding a better stock to buy than 3M Co. (MMM). It is a great technology company and deserves a place in every growth investor's portfolio.
Over the past 20
years, the stock is up six-fold. Over the past five years, since the bottom of
the recession? A very nice 182%. And don't forget, there have been dividend
payments along the way as well.
I'm sure you have a roll of 3M tape somewhere in your house and a 3M "Post It" notepad next to your phone. The company makes thousands of products, from adhesives and films to medical supplies. This company does it all, and it does it very well all around the world.
The backbone of 3M's business is its R&D department. R&D typically spends the equivalent of 5% to 6% of the company's total revenues inventing new products and making improvements to existing ones.
3M was issued its
100,000th patent in May. Innovation is at this company's core, which is why it's
been awarded so many patents since 1924. But this business isn't all about
innovation...conservative management also means reliable profits and cash
the last decade—mind you, this includes the 2008-2009 recession—MMM
has grown revenues at an average annual rate of 5.4% and net income at 6.8%. For
a company that generated over $30 billion in sales last year, this is no small
The company is a
cash cow, able to return money to shareholders in the form of stock buybacks and
dividends (current yield is 2.5%).
This isn't a stock that's going to surge 10% overnight. But it's equally unlikely to drop 10% overnight, either. It's a stock that every growth investor can own. Buy some now and buy a little more every few months.
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