Contrasting ITT (NYSE:ITT) and 3M (NYSE:MMM)

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

Earnings & Valuation

This table compares 3M and ITT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
3M	$24.83 billion	3.46	$4.17 billion	$6.26	25.83
ITT	$3.63 billion	4.13	$518.30 million	$6.02	28.97

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

Risk & Volatility

3M has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, ITT has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for 3M and ITT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
3M	1	3	7	0	2.55
ITT	0	0	10	0	3.00

3M presently has a consensus target price of $175.40, suggesting a potential upside of 8.47%. ITT has a consensus target price of $207.13, suggesting a potential upside of 18.75%. Given ITT’s stronger consensus rating and higher probable upside, analysts clearly believe ITT is more favorable than 3M.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
3M	13.70%	98.47%	11.05%
ITT	12.67%	18.96%	10.43%

Dividends

3M pays an annual dividend of $2.92 per share and has a dividend yield of 1.8%. ITT pays an annual dividend of $1.40 per share and has a dividend yield of 0.8%. 3M pays out 46.6% of its earnings in the form of a dividend. ITT pays out 23.3% 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 raised its dividend for 1 consecutive years and ITT has raised its dividend for 10 consecutive years.

Insider & Institutional Ownership

65.3% of 3M shares are owned by institutional investors. Comparatively, 91.6% of ITT shares are owned by institutional investors. 0.3% of 3M shares are owned by insiders. Comparatively, 0.5% of ITT shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

ITT beats 3M on 10 of the 17 factors compared between the two stocks.

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.

About ITT

ITT Inc., together with its subsidiaries, manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy markets in the United States and internationally. The Motion Technologies segment manufactures brake pads, shims, shock absorbers, and energy absorption components; and sealing technologies primarily for the transportation industry, including passenger cars, trucks, light- and heavy-duty commercial and military vehicles, buses, and trains. This segment sells its products under ITT Friction Technologies, KONI, Wolverine Advanced Materials, Axtone, Novitek, and GALT. brand names. The Industrial Process segment provides industrial pumps, valves, and plant optimization and remote monitoring systems and services; and aftermarket solutions, such as replacement parts and services. It serves various customers in industries, such as chemical, energy, mining, and other industrial process markets. This segment sells its products under Goulds Pumps, Bornemann, Engineered Valves, PRO Services, C'treat, i-ALERT, Rheinhütte Pumpen, and Habonim brand names. The Connect & Control Technologies segment designs and manufactures a range of engineered connectors and specialized products for critical applications supporting various markets, including aerospace and defense, industrial, transportation, medical, and energy. This segment provides connector products, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies; and control products consist of highly engineered actuation, flow control, energy absorption, environmental control, and composite component solutions for the aerospace, defense, and industrial markets under Cannon, VEAM, BIW Connector Systems, Aerospace Controls, Enidine, Compact Automation, Neo-Dyn Process Controls, Conoflow, and Micro-Mode brand names. The company was incorporated in 1920 and is headquartered in Stamford, Connecticut.