Critical Review: Benev Capital (OTCMKTS:BEVFF) versus 3M (NYSE:MMM)

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

Institutional & Insider Ownership

65.3% of 3M shares are owned by institutional investors. 12.0% of Benev Capital shares are owned by company insiders. Comparatively, 0.3% of 3M shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Benev Capital has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, 3M has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Dividends

Benev Capital pays an annual dividend of $0.20 per share and has a dividend yield of 7.3%. 3M pays an annual dividend of $2.92 per share and has a dividend yield of 1.8%. Benev Capital pays out 153.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 3M pays out 46.6% of its earnings in the form of a dividend. 3M has raised its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Benev Capital and 3M, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Benev Capital	0	1	0	0	2.00
3M	1	3	7	0	2.55

3M has a consensus target price of $175.40, suggesting a potential upside of 8.27%. Given 3M’s stronger consensus rating and higher probable upside, analysts plainly believe 3M is more favorable than Benev Capital.

Valuation & Earnings

This table compares Benev Capital and 3M”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Benev Capital	$47.44 million	9.79	$19.43 million	$0.13	20.96
3M	$24.83 billion	3.47	$4.17 billion	$6.26	25.88

3M has higher revenue and earnings than Benev Capital. Benev Capital 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 Benev Capital and 3M’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Benev Capital	43.17%	12.47%	6.04%
3M	13.70%	98.47%	11.05%

Summary

3M beats Benev Capital on 13 of the 17 factors compared between the two stocks.

About Benev Capital

Diversified Royalty Corp., a multi-royalty corporation, engages in the acquisition of royalties from multi-location businesses and franchisors in North America. It owns the Sutton, Mr. Lube + Tires, AIR MILES, Mr. Mikes, Nurse Next Door, Oxford Learning Centres, Stratus Building Solutions, and BarBurrito trademarks. The company was formerly known as BENEV Capital Inc. and changed its name to Diversified Royalty Corp. in September 2014. Diversified Royalty Corp. was founded in 1960 and is headquartered in Vancouver, Canada.

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.