3M's 4% Dividend Yield Isn't a Reason to Buy the Stock
Industrial giant 3M's (NYSE: MMM) stock is now yielding more than 4% and is very tempting for income-seeking investors. That's fair enough. If your primary focus is yield, go ahead and buy the stock.
However, it might be a different story for investors looking for capital appreciation. It seems highly likely that management will have to lower full-year guidance on its next earnings call, so if you buy the stock, be aware there's a high possibility of some negative near-term news flow. Here's why that matters.
On the first-quarter earnings call, management left its full-year guidance unchanged despite revealing a host of headwinds. As a reminder, management is calling for full-year sales growth in the range of 2% to 5%, with adjusted earnings per share (EPS) in the range of $10.75 to $11.25.
Source Fool.com
