3M (NYSE: MMM) and Icahn Enterprises L.P. (NASDAQ:IEP) are both multi-sector conglomerates companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Risk & Volatility

3M has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Icahn Enterprises L.P. has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500.

Earnings & Valuation

This table compares 3M and Icahn Enterprises L.P.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
3M $30.53 billion 4.23 $8.53 billion $8.77 24.67
Icahn Enterprises L.P. N/A N/A N/A $7.85 7.10

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

Profitability

This table compares 3M and Icahn Enterprises L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
3M 17.65% 47.83% 16.07%
Icahn Enterprises L.P. 6.35% 15.51% 4.18%

Institutional & Insider Ownership

66.2% of 3M shares are owned by institutional investors. Comparatively, 96.8% of Icahn Enterprises L.P. shares are owned by institutional investors. 0.6% of 3M shares are owned by company insiders. Comparatively, 90.1% of Icahn Enterprises L.P. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

3M pays an annual dividend of $4.70 per share and has a dividend yield of 2.2%. Icahn Enterprises L.P. pays an annual dividend of $3.00 per share and has a dividend yield of 5.4%. 3M pays out 53.6% of its earnings in the form of a dividend. Icahn Enterprises L.P. pays out 38.2% 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 58 consecutive years. Icahn Enterprises L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings for 3M and Icahn Enterprises L.P., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
3M 3 3 6 0 2.25
Icahn Enterprises L.P. 0 0 1 0 3.00

3M currently has a consensus price target of $207.78, indicating a potential downside of 3.97%. Icahn Enterprises L.P. has a consensus price target of $61.00, indicating a potential upside of 9.48%. Given Icahn Enterprises L.P.’s stronger consensus rating and higher probable upside, analysts plainly believe Icahn Enterprises L.P. is more favorable than 3M.

About 3M

3M Company is a technology company. It operates through five segments. The Industrial segment serves a range of markets, such as automotive original equipment manufacturer and automotive aftermarket, electronics, appliance, paper and printing, packaging, food and beverage, and construction. The Safety and Graphics segment serves a range of markets for the safety, security and productivity of people, facilities and systems. The Health Care segment serves markets that include medical clinics and hospitals, pharmaceuticals, health information systems, and food manufacturing and testing. The Electronics and Energy segment serves customers in electronics and energy markets, including solutions for the performance of electronic devices; electrical products, including infrastructure protection, and power generation and distribution. The Consumer segment serves markets that include consumer retail, office business to business, home improvement, drug and pharmacy retail, and other markets.

About Icahn Enterprises L.P.

Icahn Enterprises L.P. (Icahn Enterprises) is a holding company. The Company’s segments include Automotive, Energy, Metals, Railcar, Gaming, Food Packaging, Mining, Real Estate and Home Fashion. The Company’s Investment segment includes various private investment funds. The Company operates its Automotive segment through its ownership in Federal-Mogul Holdings Corporation and IEH Auto Parts Holding LLC. The Company operates Energy segment through its controlling interest in CVR Energy, Inc. It operates its Metals segment through its subsidiary, PSC Metals, Inc. The Company operates its Railcar segment through its ownership interests in American Railcar Industries, Inc. Its Food Packaging segment consists of ownership in Viskase Companies, Inc. The Company’s Real Estate operations consist of rental real estate, property development and associated resorts. It also owns a limited partner interest in Icahn Enterprises Holdings L.P. (Icahn Enterprises Holdings).

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