There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

May 19, 2009 - 3M Company (MMM-NYSE) together with its subsidiaries, operates as a diversified technology company worldwide. It operates in six segments: Industrial and Transportation; Health Care; Safety, Security and Protection Services; Consumer and Office; Display and Graphics; and Electro and Communications.

The Health Care segment provides medical and surgical supplies, skin health and infection prevention products, drug delivery systems, dental and orthodontic products, health information systems, and anti-microbial solutions.

The Safety, Security, and Protection segment offers personal protection products, safety and security products, energy control products, cleaning and protection products for commercial establishments, track and trace solutions, and roofing granules for asphalt shingles.

The Consumer and Office segment provides office supply products, stationery products, construction and home improvement products, home care products, protective material products, and consumer health care products.

The Display and Graphics segment offers optical film solutions for electronic displays; computer screen filters; reflective sheeting for transportation safety; commercial graphic systems; and projection systems, including mobile display technology and visual systems products.

The Electronic and Communications segment provides electronic and interconnect solutions, microinterconnect systems, high-performance fluids, high-temperature and display tapes, telecommunications products, electrical products, and touch screens and touch monitors. The company was formerly known as Minnesota Mining and Manufacturing Company. 3M Company was founded in1902 and is based in St. Paul, Minnesota.

You thought they just made Post-It notes. They do, and it's still a very successful item for them, but obviously, this is a large company with a very diverse revenue base. With the economy weakened, it's only natural that it would suffer in revenues and profits as demand shrinks. However, if you're an investor thinking the worst is over, that the economy will turn sooner rather than later, and you have a conservative bent to your portfolio, then 3M may be offering an entry point that hasn't been seen in many years.

Sales are expected to be lower this year. They've been climbing the last three years, going from $22.923 billion in 2006, then going to $24.462 billion. Last year, they reached $25.269 billion. Analyst predict this year will show $21.31 billion (there are 10 analysts that show a range of $19.5 billion to $22.45 billion). Next year, the consensus is for $22.25 billion
(with a range of $19.66 billion and $24.26 billion).

Earnings aren't immune from the economy either. In 2006, they were $5.06 a share, then $5.60. Last year, they turned lower, to $5.17. This year, analysts have a consensus of $3.87 (16 analysts give predictions on the earnings; the range is $3.31 to $4.45). Next year, there's a consensus at $4.31 with a range fo $3.30 to $5.36. Management has given guidance of $3.90 to $4.30, lower than the previous guidance of $4.30 to $4.70 for 2009.

The stock may have already priced in these lower numbers. It traded at its all-time high of $97 (prices are split adjusted for a 2 for 1 split in 2003) in 2007. Then in March of this year, it hit $40.90, a multi-year low. It rebounded to $59 which is still well below that all time high. Of course, earnings were doing better at that time with the forecasts of even better times ahead. Those forecasts have changed.

First quarter earnings were 74 cents a share on $5.1 billion in sales. That's 46% below last year's first quarter earnings and 21% below last year's first period sales. All 6 divisions saw lower sales and earnings. 2 hit harder than others were Industrial and Transportation and Electronic and Communications. On the brighter side, HealthCare and Consumer and Office showed only small decreases in income. The company isn't hoping for a quick recovery. It's cutting costs, reducing output, and working on operating efficiencies.

More numbers: P/E is 13.85. Price to Sales is 1.68. Price to Book is 4.13. Operating margin in the last 12 months was 20.49%; Profit margin was 12.51%. Return on Equity was a remarkable 27%. There's $1.88 billion in cash. Total debt is $6.03 billion. Debt to Equity is .5. Current ratio is 1.83. Book Value is $14.02. There are 694.3 million shares outstanding and a float of 686.6 million. Value Line gives 3M a Financial Strength rating of A++.

Conservative investors who feel the global economy will start recovering by the end of the year will want to analyze this blue-chip more closely. With a price of less than $60, the stock appears to be at levels that won't be seen for long. Of course, if those revenues and profit numbers continue to go lower, so will the stock, giving an even better entry point.

- Company Web site: www.mmm.com

- Ted Allrich