10 Best Performing Dow Stocks in 2024

02. 3M Company (NYSE:MMM)

Year to date Share Price Gain: 49.45%

Number of Hedge Fund Holders: 66

3M Company (NYSE:MMM) has had an impressive performance this year, with its stock gaining 49.45% year-to-date. The company recently released its Q2 2024 earnings report, which exceeded expectations and showcased strong operational performance. The company reported earnings per share (EPS) of $1.93, significantly higher than the consensus estimate of $1.68. This positive performance underscores the effectiveness of 3M Company (NYSE:MMM) strategic initiatives and operational improvements.

During the second quarter, 3M Company (NYSE:MMM) achieved revenue of $6 billion and an operating margin of 21.6%, which expanded by 440 basis points year-over-year. This growth was driven by organic growth, strict cost management, and restructuring savings. Additionally, the company delivered $1.2 billion in free cash flow, reflecting a solid cash conversion rate of 109%. This strong cash generation, combined with an expanded operating margin, highlights 3M’s continued ability to deliver shareholder value amidst a complex global economic environment.

The company is also benefiting from its recent organizational changes, including the successful spin-off of its healthcare business, Solventum, which contributed to improved efficiency and better resource allocation. 3M’s leadership is focusing on driving organic growth by investing in high-potential end markets such as auto electrification, climate tech, and industrial automation. The company’s R&D investment of $1 billion annually, or 4.5% of its revenue, positions it well to leverage these growth opportunities.

In Q2 2024, the number of hedge funds holding 3M Company (NYSE:MMM) increased to 66, up from 64 in the previous quarter, demonstrating rising institutional interest in the stock. The company’s strong balance sheet, low leverage ratios, and improved ratings outlook further bolster its investment appeal.

3M Company (NYSE:MMM) management also emphasized capital efficiency, with $400 million of stock repurchased during the quarter and a clear commitment to share buybacks in the second half of the year. The company’s focus on optimizing its supply chain and reducing costs has also started yielding results, with a target to lower inventory levels and unlock nearly $1 billion in cash over time. Overall, 3M Company (NYSE:MMM) robust financials, strategic realignments, and focus on operational excellence make it a compelling choice for investors, positioning it as one of the best-performing Dow stocks in 2024.