3M Stock vs. Honeywell Stock: Which Is A Better Investment?
3M stock is up 33% so far this year, driven by a combination of strategic and operational improvements, including a successful strategic turnaround, which involves cost-cutting and shifting the product mix toward higher-margin items. Key contributing factors include strong financial performance, with the company consistently beating analyst expectations for earnings and revenue. This momentum led to increased guidance, with the company raising its full-year 2025 adjusted EPS guidance for the second time in October. Finally, the easing of litigation overhang through major settlements (PFAS and earplugs) has reduced investor uncertainty, supported by aggressive new product innovation and improved operational discipline.
In contrast, Honeywell stock is down 9% over the same period. This decline occurred despite the company’s generally solid financial results and is primarily due to several investor concerns. A major factor is concerns over growth, with some analysts citing that while fundamentals are robust, the planned company split is unlikely to accelerate growth.
The stock also reacted poorly to mixed earnings reports. The company is facing margin pressure due to significant operational cost increases reported in the first half of the year. The strategy to split into three separate companies introduced complexity and uncertainty, contributing to an early-year tumble, with the spin-off of the advanced materials unit, Solstice, projected to negatively impact 2025 sales and free cash flow. As a result, HON stock has been lagging sector performance, underperforming peers and the broader Industrial Select Sector SPDR Fund (XLI).
But here’s the thing. Despite 3M’s significant stock outperformance this year, Honeywell appears to be the better investment pick over 3M currently. This conclusion is based on the argument that HON stock offers superior revenue growth across key periods, better profitability, and a relatively lower valuation compared to MMM.
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That being said, if you seek an upside with less volatility than holding an individual stock like HON or MMM, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 105% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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Honeywell offers superior revenue growth across key periods, better profitability, and relatively lower valuation vs. 3M:
- HON’s quarterly revenue growth was 7.0%, vs. MMM’s 3.5%.
- In addition, its Last 12 Months revenue growth came in at 7.5%, ahead of MMM’s 1.1%.
- HON’s 3-year average margin is stronger: 19.5% vs. MMM’s 1.1%.
- These differences become even clearer when you look at the financials side by side.
The table highlights how MMM’s fundamentals stack up against those of HON on growth, margins, momentum, and valuation multiples.
Valuation & Performance Overview
Valuation & Performance Overview
Note: For “Last 3 Year Return” metric, preferred stock is one with higher returns unless the returns are too high (>300%) which creates risk of sell off.
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See detailed fundamentals on Buy or Sell HON Stock and Buy or Sell MMM Stock. Below, we compare market return and related metrics across years.
Historical Market Performance
Historical Market Performance
No matter how good the numbers, stock investment is never a smooth ride. There is a risk you must factor in. Read HON Dip Buyer Analyses to see how the stock has fallen and recovered in the past.
Still not sure about MMM or HON? Consider a portfolio approach.
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Markets move differently, but a mix of assets smooths volatility. A multi-asset portfolio keeps you invested and reduces the impact of sharp drops in any single area.
The asset allocation framework of Trefis’ Boston-based wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’s strategy now includes the Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all three – the S&P 500, S&P mid-cap, and Russell 2000 indices
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