Solventum (NYSE:SOLV), the healthcare company spun off by 3M (NYSE:MMM), has started trading independently today on the New York Stock Exchange.
Here are seven things investors should know about the spinoff, 3M and it shares, and Solventum and SOLV stock.
7 Things to Know as SOLV Stock Starts Trading
- With the spinoff, owners of MMM stock obtained one share of SOLV stock for every four shares of 3M that they owned.
- 3M has kept a 19.9% stake in Solventum but intends to sell the shares “within five years.”
- Some have compared 3M to General Electric (NYSE:GE), which spun off its own healthcare unit early last year. GE stock has jumped about 140% since the completion of its spinoff.
- Among Solventum’s main focuses as a healthcare business are “wound care, health care IT, oral care, filtration and purification.”
- After 3M announced a quarterly dividend of $1.51 per share in February, the shares have a forward annual dividend yield of 5.7%.
- However, some speculate that 3M will cut its dividend in the wake of the transaction, following in the footsteps of other large companies that have carried out major spinoffs in recent years.
- In March, 3M tapped William Brown to be its new CEO, effective May 1. Brown was previously CEO of L3Harris Technologies (NYSE:LHX).
More About 3M
On March 19, Barclays raised its rating on MMM stock to “overweight,” citing a belief that Brown will be able to increase the firm’s profit margins.
MMM stock has a rather low forward price-to-earnings (P/E) ratio of 11.1 times. Its trailing price-to-sales (P/S) ratio of 1.8 times is also tiny. However, the firm has a high net debt of $10.1 billion and recently disclosed a $6 billion lawsuit settlement.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
