After a Volatile Run, Here's the Honest Buy, Sell, or Hold on 3M

In the industrial sector, 3M (NYSE: MMM) has an iconic name and an impressive history. However, it has also been working through a very difficult period. Owning the stock has been a rollercoaster ride. The stock has been generally rising over the past three years, but investors shouldn't go in thinking that the volatility is over just yet.

Buy 3M?

There are many things to like about 3M. For example, it is an iconic industrial giant with a broadly diversified portfolio. While the dividend was reduced in 2024 following a spin-off (more on this move below), it has a long history of rewarding investors with dividend increases. In fact, the dividend has already been increased twice since the reduction, showing that the dividend is back in growth mode.

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The business, meanwhile, is doing reasonably well, with adjusted earnings up 10% in 2025. Adjusted earnings rose nearly 14% in the first quarter of 2026. Add in a well above market 2.1% dividend yield, and you can see why long-term growth and income focused investors might find the stock appealing.

Sell 3M?

That said, 3M has been a very volatile stock, and the business has changed dramatically over the past few years. The biggest event was the spin-off of Solventum (NYSE: SOLV). That company is basically 3M's former healthcare division, which was its fastest-growing business. Management spun that business off to raise the cash it needed to address material legal issues related to earplugs it sold to the military and to forever chemicals it has long produced.

The Solventum spin-off was the right move and gives 3M significant leeway to address its legal troubles. However, those legal headwinds aren't over yet and are likely to remain a dark cloud for years to come. Worse, the company can't actually provide much information about the legal proceedings, so investors don't have a good way to track what is going on. If you don't like uncertainty, 3M is a stock you should probably consider selling. Notably, one of the adjustments made to adjusted earnings in 2025 was to remove $1.95 per share of litigation-related expenses.

Hold 3M?

If you have owned 3M for a few years, you have lived through a rough period. The stock is up nearly 70% over the past three years, but down 11% over the past five years. And it is currently off its 52-week high by nearly 15%. But, if you have owned through this rollercoaster ride, there's no particular reason to sell it now unless you are tired of the volatility.

In the long term, 3M is likely to resolve its legal issues and continue to grow its business, albeit more slowly than before, following the Solventum spinoff. Just recognize that volatility is likely to persist for a while as Wall Street continues to react to legal news, the company's financial results, and the typical volatility of the cyclical industrial sector.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends 3M. The Motley Fool recommends Solventum. The Motley Fool has a disclosure policy.