3M Co. (MMM)

Stockchase Research Editor: Michael O'Reilly Although a little down trodden, we reiterate this Dividend Aristocrat as a TOP PICK. For 65 years MMM has increased its dividend and today the yield is over 4%, backed by a payout ratio under 60% of cash flow. Recently reported earnings beat estimates by 13% and support a stellar 40% ROE. The company has been aggressively buying back shares and retiring debt, while maintaining its cash reserves. We recommend adjusting the trailing stop to $134, looking to achieve $170 -- upside potential of 15%. Yield 4.01% (Analysts’ price target is $169.86)

Stockchase Research Editor: Michael O'Reilly We reiterate MMM as a TOP PICK. The company has benefited, and will likely continue to for a while longer, with the N95 mask manufacturing during the pandemic. It trades at values equivalent to its peers at 17x earnings. It pays a solid dividend backed by a payout ratio of under 60% of cash flow. The company continues to build cash reserves, while paying down debt. We would buy this with a stop loss at $165, looking to achieve $205 -- upside potential over 16%. Yield 3.36% (Analysts’ price target is $200.26)

(A Top Pick Sep 24/20, Up 14.5%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with MMM has achieved its $185 objective. To be disciplined, we recommend removing 50% of the position. We also recommend trailing up the stop to $165. This would all but guarantee a minimum return exceeding 8%.

Stockchase Research Editor: Michael O'Reilly We are being rewarded for our patience and are making MMM a Top Pick following a recent pullback in the stock. As previously reported, the maker of the N95 masks has been in the spot light as they have directly been keeping front line workers safer during the pandemic. For 2020 they expect to have produced 2 billion of the masks and continue to partner with the US Department of Defense. The company is mulling over selling the food safety business for $3.5 billion -- 10 times annual revenues of the segment. The segment contributed 1% of total sales in 2019. Their health care segment is expected to pick up as well, after seeing a 12% yoy slowdown, as delays in elective procedures are removed. It has an attractive yield that is backed by a payout ratio of 65% of cash flow. We look for this to test $185 and would use $149 as a stop-loss. Yield 3.69% (Analysts’ price target is $166.47)

Stockchase Research Editor: Michael O'Reilly The maker of the N95 masks has been in the spot light as they have directly been keeping front line workers safer during the pandemic. For 2020 they expect to have produced 2 billion of the masks and continue to partner with the US Department of Defense. The automotive OEM business has struggled with sales down 44% during the pandemic, but analysts expect that to rebound and that could have a sizable impact to the bottom line. Their health care segment is expected to pick up as well, after seeing a 12% yoy slowdown, as delays in elective procedures are removed. It has an attractive yield that is backed by a payout ratio of 65% of cash flow. We like the technical breakout recently and look for this Top Pick to test $185. We would like to buy on a pullback to $160 -- looking for over 15% upside. Yield 3.47%