3M (NYSE:MMM) vs. Orkla Asa (OTCMKTS:ORKLY) Critical Review

Orkla Asa (OTCMKTS:ORKLY) and 3M (NYSE:MMM) are both large-cap multi-sector conglomerates companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Insider and Institutional Ownership

65.3% of 3M shares are owned by institutional investors. 0.3% of 3M shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Orkla Asa and 3M, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orkla Asa	0	0	0	1	4.00
3M	1	3	7	0	2.55

3M has a consensus target price of $175.40, suggesting a potential upside of 7.89%. Given 3M’s higher probable upside, analysts plainly believe 3M is more favorable than Orkla Asa.

Volatility and Risk

Orkla Asa has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500. Comparatively, 3M has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Orkla Asa	15.49%	13.29%	7.46%
3M	13.70%	98.47%	11.05%

Dividends

Orkla Asa pays an annual dividend of $0.27 per share and has a dividend yield of 2.4%. 3M pays an annual dividend of $2.92 per share and has a dividend yield of 1.8%. Orkla Asa pays out 26.0% of its earnings in the form of a dividend. 3M pays out 46.6% 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. Orkla Asa is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Orkla Asa and 3M”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orkla Asa	$6.57 billion	N/A	$546.95 million	$1.04	10.78
3M	$24.83 billion	3.48	$4.17 billion	$6.26	25.97

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

Summary

3M beats Orkla Asa on 12 of the 17 factors compared between the two stocks.

About Orkla Asa

Orkla ASA engages in branded consumer goods, and industrial and financial investment businesses. The company offers branded products, including frozen pizza, ketchup, soups, sauces, bread toppings, and ready-to-eat meals through grocery channels, as well as food service, convenience stores, and petrol stations. It also provides confectionery, biscuit, and snack products; and spices, masalas, and various food products based on dried mixes. In addition, the company offers personal care, hygiene, laundry detergent, and cleaning products; dietary supplement, oral care, sport nutrition, and weight control products; wound care products and first aid equipment; painting tools and accessories; basic and wool garments; and professional cleaning products. It operates Gymgrossisten, Proteinfabrikken, Bodystore, and Fitnesstukku e-commerce portals for health and sports nutrition products; and restaurants. Additionally, the company supplies margarine and butter blends, bread and cake improvers and mixes, yeast, marzipan, and ice cream ingredients; produces and supplies hydro power to the Nordic power market; and develops and sells real estate properties. It offers its food products under the Grandiosa, TORO, Stabburet, Felix, Paulúns, Fun Light, Abba, Beauvais, Kalles, Den Gamle Fabrik, Hamé, and Vitana brands; confectionery and snacks under the KiMs, Nidar, Stratos, Sætre, Göteborgs Kex, OLW, Panda, Laima, Selga, Taffel, Kalev, and Nói Síríus brands; home and personal care products under Zalo, OMO, Blenda, Jif, Define, Solidox, Dr Greve, Lano, and Bliw; health produtcs under Möller's, Jordan, Vitalab, OSL, Cederroth First Aid, Salvequick, Livol, Nutrilett, Maxim, Collett, Solidox and CuraMed brands; and food ingredients under the Odense, Mors Hjemmebakte, KronJäst, Bakkedal, and NATURLI brands. It has operations in Norway, Sweden, Denmark, Finland, Iceland, the Baltics, rest of Europe, and internationally. The company was founded in 1918 and is headquartered in Oslo, Norway.

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.