Every 3M Investor Should Keep an Eye on These 3 Numbers

Core Viewpoint - 3M's stock has experienced significant volatility due to ongoing litigation related to PFAS chemicals, but shares have rebounded by over 50% in the past year following a large settlement [1]. Financial Performance - 3M's profitability metrics, including return on assets (ROA) and return on equity (ROE), have stabilized after the settlement, with ROA averaging just above 10% and ROE hovering just below 30% in recent years [3][7]. - The disparity between ROE and ROA is attributed to the company's reliance on debt to enhance shareholder returns, which can be beneficial unless debt levels become unsustainable [4][5]. Debt and Legal Challenges - Since the onset of PFAS-related legal issues, 3M's debt-to-equity ratio has increased significantly, contributing to the rebound in ROE despite lower ROA levels [7]. - Future financial instability is anticipated due to potential additional class-action lawsuits and legal challenges from state governments, which could impact the company's financial health [7][8].