Financial Review: Siemens (OTCMKTS:SIEGY) vs. 3M (NYSE:MMM)

Siemens (OTCMKTS:SIEGY) and 3M (NYSE:MMM) are both large-cap industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Analyst Ratings

This is a summary of recent recommendations for Siemens and 3M, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Siemens	1	4	5	1	2.55
3M	2	5	8	0	2.40

3M has a consensus price target of $179.36, indicating a potential upside of 7.10%. Given 3M’s higher probable upside, analysts clearly believe 3M is more favorable than Siemens.

Dividends

Siemens pays an annual dividend of $2.33 per share and has a dividend yield of 1.5%. 3M pays an annual dividend of $3.12 per share and has a dividend yield of 1.9%. Siemens pays out 39.5% of its earnings in the form of a dividend. 3M pays out 55.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 3M has increased its dividend for 1 consecutive years. 3M is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Siemens has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, 3M has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares Siemens and 3M”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Siemens	$87.26 billion	2.82	$10.65 billion	$5.90	26.67
3M	$25.18 billion	3.43	$3.25 billion	$5.63	29.74

Siemens has higher revenue and earnings than 3M. Siemens is trading at a lower price-to-earnings ratio than 3M, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Siemens and 3M’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Siemens	9.79%	11.13%	4.75%
3M	11.90%	115.87%	12.52%

Institutional and Insider Ownership

0.7% of Siemens shares are owned by institutional investors. Comparatively, 65.2% of 3M shares are owned by institutional investors. 0.2% of 3M shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

3M beats Siemens on 11 of the 18 factors compared between the two stocks.

About Siemens

Siemens Aktiengesellschaft, a technology company, focuses in the areas of automation and digitalization in Europe, Commonwealth of Independent States, Africa, the Middle East, the Americas, Asia, and Australia. It operates through Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services (SFS) segments. The Digital Industries segment provides automation systems and software for factories, numerical control systems, servo motors, drives and inverters, and integrated automation systems for machine tools and production machines; process control systems, machine-to-machine communication products, sensors and radio frequency identification systems; software for production and product lifecycle management, and simulation and testing of mechatronic systems; and the Mendix cloud-native low-code application development platform. The Smart Infrastructure segment offers products, systems, solutions, services, and software to support sustainable transition in energy generation from fossil and renewable sources; sustainable buildings and communities; and buildings, electrification, and electrical products. The Mobility segment provides rail passenger and freight transportation, such as vehicles, trams and light rail, and commuter trains, as well as trains and passenger coaches; locomotives and solutions for automated transportation; products and solutions for rail automation; electrification products; maintenance and digital services; and digital and cloud-based solutions, and related services. The Siemens Healthineers segment develops, manufactures, and sells various diagnostic and therapeutic products and services; and provides clinical consulting and training services. The SFS segment offers debt and equity investments; leasing, lending, and working capital, structured, equipment, and project financing; and financial advisory services. Siemens Aktiengesellschaft was founded in 1847 and is headquartered in Munich, Germany.

About 3M

3M Company provides diversified technology services in the United States and internationally. The company’s Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; autobody repair solutions; closure systems for personal hygiene products, masking, and packaging materials; electrical products and materials for construction and maintenance, power distribution, and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye, and fall protection solutions; and natural and color-coated mineral granules for shingles. Its Transportation and Electronics segment provides ceramic solutions; attachment/bonding products, films, sound, and temperature management for transportation vehicles; premium large format graphic films for advertising and fleet signage; light management films and electronics assembly solutions; packaging and interconnection solutions; semiconductor production materials; data centers solutions; and reflective signage for highway, and vehicle safety. The company’s Consumer segment provides consumer bandages, braces, supports, and consumer respirators; home cleaning products; retail abrasives, paint accessories, car care DIY products, picture hanging, and consumer air quality solutions; and stationery products. It offers its products through e-commerce and traditional wholesalers, retailers, jobbers, distributors, and dealers. 3M Company was founded in 1902 and is headquartered in Saint Paul, Minnesota.