3M vs. Carlisle: Which Industrial Conglomerate Stock is a Stronger Pick?

3M Company MMM and Carlisle Companies Incorporated CSL are two familiar names operating in the Zacks Diversified Operations industry. Both companies compete in multiple sectors with significant overlap in the roofing, waterproofing and engineered product markets.Both companies are poised to benefit from solid growth prospects in the construction sector, driven by the resiliency of repair and remodelling activity. But which company is better positioned to deliver upside in 2025? Let’s compare their fundamentals, growth prospects and challenges to see which stock stands out now.The Case for 3M3M is witnessing solid momentum in the Safety and Industrial segment. Strong demand across roofing granules, industrial adhesives and tapes, and electrical markets has been driving the segment’s performance. Significant orders for aluminum high-capacity conductors and power cable accessories, driven by growth in demand from data centers and renewable energy projects, augur well for the segment. The segment’s organic sales increased 2.5% year over year in the first quarter of 2025.The aerospace industry has also been witnessing positive momentum, cushioned by growth in air travel and continued OEM spending. Solid momentum in the commercial aircraft and defense-related business and project wins in the advanced materials business are proving beneficial for the Transportation and Electronics segment. Backed by strength across its businesses, the company expects total adjusted organic sales to grow 2-3% in 2025 on a year-over-year basis.3M remains focused on rewarding its shareholders through dividends and share buybacks. In the first quarter, the company rewarded its shareholders with a dividend payout of $396 million and bought back shares worth $1.3 billion. Also, in 2024, it paid dividends worth $2 billion and repurchased shares for $1.8 billion. MMM exited the first quarter with $6.6 billion remaining under its authorized share repurchase program. In February 2025, it also hiked its quarterly dividend by 4%.However, persistent softness in the retail end markets, led by a decrease in consumer discretionary spending, remains a persistent concern. This is reflected in the Consumer segment’s revenues, which declined 1.4% in the first quarter. There was a particular weakness in the command and packaging expression businesses. Also, softness in the auto OEM business due to low auto build rates in Europe and the United States is concerning.High debt levels have also been a major concern. Exiting first-quarter 2025, the company’s long-term debt totaled $12.3 billion, reflecting an increase of 10.8% sequentially. Its short-term borrowings and current portion of long-term debt totaled $1.2 billion. Its debt level increased as a result of the issuance of $1.1 billion in aggregate principal amount of debt, which was partially offset by $750 million of debt maturities.The company has also been subject to several litigations, including earplug lawsuits. It has committed substantial funds to resolve these disputes, as ongoing litigation might lead to additional expenses.The Case for CarlisleThe strongest driver of Carlisle’s business at the moment is strength in the Construction Materials segment, driven by robust demand for reroofing products. Higher sales in the non-residential construction market in the United States and Europe, driven by the acquisition of MTL and growing re-roof activity as a result of pent-up demand, have been driving the segment’s performance. In the first quarter of 2025, revenues from the segment increased 2% year over year.In the quarters ahead, the company expects the non-residential construction market to continue benefiting as customers are undertaking several projects related to the replacement of older, existing roofs on non-residential structures. Backed by strong contractor backlogs and growing customer demand, the company expects total revenues to increase in mid-single digits year over year in 2025.CSL remains highly committed to adding to its shareholders’ wealth. For instance, in the first three months of 2025, it rewarded its shareholders with a dividend payment of $45.2 million and bought back shares worth $400 million. Also, in 2024, Carlisle paid dividends worth $172.4 million and spent $1.59 billion on share buybacks. In August 2024, it hiked its dividend by 18%.However, lower volumes in the residential construction market and project delays are adversely affecting the Weatherproofing Technologies segment. The slowdown in the new housing, repair and remodel activities, due to high interest rates, unfavorable weather conditions and affordability challenges, has been affecting the segment’s performance. Despite this, strong underlying drivers, such as growing popularity for its building envelope solutions, expectations about upcoming rate cuts and synergies around new products in waterproofing are likely to drive the segment in the long term.Escalating costs and expenses have remained another concern for CSL. In the first quarter, its cost of sales increased 1.8% year over year, while selling and administrative expenses rose 16.3%. Also, in 2024, its selling and administrative expenses and cost of sales increased 15.6% and 5.5%, respectively, year over year.How Does the Zacks Consensus Estimate Compare for MMM & CSL?While the Zacks Consensus Estimate for MMM’s 2025 sales implies a year-over-year decline of 9.8%, the same for its earnings per share (EPS) indicates growth of 4.9%. The EPS estimates for both 2025 and 2026 have declined over the past 60 days.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for CSL’s 2025 sales and EPS implies year-over-year growth of 4.5% and 9.6%, respectively. While Carlisle’s EPS estimates for 2025 have declined, the estimates for 2026 have increased over the past 60 days.Image Source: Zacks Investment ResearchPrice Performance and Valuation of MMM & CSLIn the past three months, 3M shares have lost 1.5%, while Carlisle stock has gained 12.6%.Image Source: Zacks Investment Research3M is trading at a forward 12-month price-to-earnings ratio of 18.37X, above its median of 12.03X over the last three years. Carlisle’s forward earnings multiple sits at 16.12X, close to its median of 15.07X over the same time frame.Image Source: Zacks Investment ResearchFinal Take3M and Carlisle have a Zacks Rank #3 (Hold) each, which makes choosing one stock a difficult task. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.3M’s strength in the safety, industrial and aerospace markets has been dented by the continued weakness in its consumer retail market. Also, MMM’s downward earnings estimate revisions for both 2025 and 2026 warrant a cautious approach for existing investors.In contrast, Carlisle’s robust momentum in the Construction Materials segment, growth investments and accretive acquisitions bode well for strong growth in the quarters ahead. Additionally, CSL’s attractive valuation is more appealing and its upwardly revised estimates instill confidence. Given these factors, CSL seems a better pick for investors than MMM currently.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report 3M Company (MMM): Free Stock Analysis Report Carlisle Companies Incorporated (CSL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks