Head-To-Head Contrast: Griffon (NYSE:GFF) and 3M (NYSE:MMM)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
3M	$24.60 billion	3.33	$4.17 billion	$7.19	21.42
Griffon	$2.62 billion	1.34	$209.90 million	$1.34	56.37

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

Risk and Volatility

3M has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Griffon has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Dividends

3M pays an annual dividend of $2.92 per share and has a dividend yield of 1.9%. Griffon pays an annual dividend of $0.72 per share and has a dividend yield of 1.0%. 3M pays out 40.6% of its earnings in the form of a dividend. Griffon pays out 53.7% 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 Griffon has raised its dividend for 1 consecutive years. 3M is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

65.3% of 3M shares are held by institutional investors. Comparatively, 73.2% of Griffon shares are held by institutional investors. 0.3% of 3M shares are held by company insiders. Comparatively, 10.2% of Griffon shares are held 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 breakdown of recent ratings and recommmendations for 3M and Griffon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
3M	1	2	7	0	2.60
Griffon	0	0	3	2	3.40

3M currently has a consensus target price of $161.78, indicating a potential upside of 5.04%. Griffon has a consensus target price of $98.20, indicating a potential upside of 30.01%. Given Griffon’s stronger consensus rating and higher possible upside, analysts plainly believe Griffon is more favorable than 3M.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
3M	16.01%	96.48%	10.62%
Griffon	2.78%	144.21%	11.56%

Summary

Griffon beats 3M on 9 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 Griffon

Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products. The Home and Building Products segment manufactures and markets residential and commercial sectional garage doors, rolling steel service doors, fire doors, shutters, steel security grilles, and room dividers for the use in commercial construction and repair, and home remodeling applications. The segment also sells related products, such as garage door openers. The Consumer and Professional Products segment manufactures and markets long-handled engineered tools, including spades, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks; wheelbarrows and lawn carts; snow tools comprising pushers, roof rakes, sled sleigh shovels, scoops, and ice scrapers; and pruning products, such as pruners, loppers, shears, and other tools. The segment also offers striking tools, including axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars, and repair handles; traditional and gardening hand tools comprising hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, trowels, cultivators, weeders, and other hand tools; indoor and outdoor planters and lawn accessories; and garden hoses and hose reels. In addition, the segment provides home organization products, including wire and wood shelving, containers, storage cabinets, and other closet and home organization accessories; residential, industrial, and commercial fans; and cleaning products, such as brooms, brushes, squeegees, and other cleaning products. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1774 and is headquartered in New York, New York.