{"id":66179,"date":"2023-09-27T20:09:19","date_gmt":"2023-09-28T00:09:19","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/should-you-pick-starbucks-over-3m-stock-for-next-three-years\/"},"modified":"2023-09-27T20:09:22","modified_gmt":"2023-09-28T00:09:22","slug":"should-you-pick-starbucks-over-3m-stock-for-next-three-years","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=66179","title":{"rendered":"Should You Pick Starbucks Over 3M Stock For Next Three Years?"},"content":{"rendered":"
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We believe Starbucks stock<\/strong> (NASDAQ
\n NDAQ
\n <\/fbs-ticker>: SBUX) is a better pick than 3M stock<\/strong> (NYSE: MMM), given its better prospects. Although these companies are from different sectors, we compare them because they have a similar operating income of around $4 billion (2022) and both are part of the broader S&P 100 index. The decision to invest often comes down to finding the best stocks within the parameters of certain characteristics that suit an investment style. The size of profits can matter, as larger profits can imply greater market power. Since these stocks are from different sectors, comparing P\/S against one another may not be helpful. We compare their current multiples with the historical ones in the sections below to better gauge their valuations.<\/p>\n

Interestingly, MMM stock has had a Sharpe Ratio of -0.4<\/strong> since early 2017, lower than 0.3 <\/strong>for SBUX and 0.6<\/strong> for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3<\/strong> for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.<\/p>\n

Looking at stock returns, both have underperformed vis-\u00e0-vis broader markets amid slowing economic growth. While MMM is down 21% this year, SBUX is down 7%, and the S&P500 index is up 13%. 3M stock, in particular, has been weighed down due to its litigations. There is more to the comparison, and in the sections below, we discuss why we believe SBUX will offer better returns than MMM in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation, in an interactive dashboard analysis of 3M vs. Starbucks<\/strong>
\n SBUX
\n <\/fbs-ticker>: Which Stock Is A Better Bet?<\/strong> Parts of the analysis are summarized below.<\/p>\n

1. Starbucks\u2019 Revenue Growth Is Better <\/strong><\/p>\n