3M
Over the past 12 months, shares of Dow component 3M Co. (NYSE: MMM) have tumbled by about 33%. 3M was among our Dogs of the Dow for 2023, one of 10 Dow stocks paying the highest dividend, largely due to a falling share price. The dividend yield is even a bit higher since January 3 because shares have fallen more than 1% in the first few weeks of the year. 3M has produced dividend growth for 64 consecutive years, and its payout ratio is nearly 52%.
Analyst sentiment is decidedly cool on the stock. Of 20 brokerages surveyed, 14 have a Hold rating. There is just one Buy rating and five Sell or Strong Sell ratings. At a per-share price of around $117.20, the implied gain based on a median price target of $124.50 is 6.2%. At the high target of $210.00, the upside potential is 79.2%.
The consensus revenue estimate for the fourth quarter is $8.08 billion, down 6.2% sequentially and 6.2% lower year over year. Adjusted EPS are forecast at $2.39, a sequential decline of 11% and an increase of 3.5% year over year. For the full 2022 fiscal year, analysts are looking for EPS to rise by 0.6% to $10.18 on a revenue decline of 3.3% to $34.19 billion.
3M stock trades at 11.5 times expected 2022 EPS, 11.5 times estimated 2023 earnings of $10.26 and 11.1 times estimated 2024 earnings of $10.60 per share. The stock’s 52-week range is $107.07 to $179.22, and 3M pays an annual dividend of $5.96 (yield of 5.03%). Total shareholder return for the past 12 months was negative 29.5%.
Verizon
The third Dow stock reporting results Tuesday morning is telecom giant Verizon Communications Inc. (NYSE: VZ). Both Verizon and AT&T are getting slammed by T-Mobile’s growing leadership in the build-out of 5G networks. T-Mobile’s median download speed on its 5G network is 216.56 megabits per second, compared to 127.95 for Verizon and 85.39 for AT&T. T-Mobile also has been growing its subscriber base more quickly than either of its major competitors. Verizon did roll out some prepaid offers during the fourth quarter, and investors are going to take a close look at how that turned out.
Analysts remain cautious. Of 29 analysts, only eight have Buy or Strong Buy ratings on the stock, and 20 have Hold ratings. At a share price of around $39.90, the implied gain based on a median price target of $45.00 is 12.8%. At the high price target of $64.00, the potential upside is 60.4%.
Fourth-quarter revenue is forecast to come in at $35.21 billion, up 2.8% sequentially and by 3.3% year over year. Adjusted EPS are forecast at $1.19, up 2.8% sequentially but down by 9.2% year over year. For the full 2022 fiscal year, analysts expect Verizon to post EPS of $5.18, down 3.9%, on sales of $136.68 billion, up 2.3%.
Verizon stock trades at 7.7 times expected 2022 EPS, 8.0 times estimated 2023 earnings of $5.01 and 7.9 times estimated 2024 earnings of $5.03 per share. The stock’s 52-week range is $34.55 to $55.51. Verizon pays an annual dividend of $2.61 (yield of 6.52%). Total shareholder return over the past 12 months was negative 20.7%. Verizon was the top dog among 2023’s Dogs of the Dow.
Originally published at 24/7 Wall St.
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