3M has agreed to $6 B settlement. Hopefully this brings closure to the issue and the stock can move on. Anticipating the news the stock jumped yesterday. However, there are additional settlements pending…
I could not find the existing thread on this subject. For those interested…
As I understand it, this is the ear plug lawsuit with the military. But they also have a multibillion dollar suit over forever chemicals yet to be resolved. They have tried to spin off the liability under a plan they call the Texas Two Step. But so far judges have not allowed that.
Some say the dividend may be at risk (or worse). Recall the Manville asbestos settlement in which company assets were pledged to the plaintiffs and shareholders lost all.
Talking heads on Wall Street seem to think 3M is a great stock to own. But my view is very risky. Not with a ten foot pole.
The forever chemicals settlement could be as high as $20 to $30 B. Once it is clear then we know what is the liability and move on. The dividend is $3.5 B, and have $5B earnings capacity. Can they survive even a $30 B fine, probably they can. Once everything is known then they may look at their dividend. Also, note, the settlement on “ear litigation” came less than what they anticipated and reserved.
FWIW, MMM has no buys from the “sell side” or brokerages. What does it mean? when the tide turns, everyone is going to come with buy at some point, that is going to be a strong tailwind. The only question is, has the tide turned?