Believe it or not, face mask stocks just might be the next billion-dollar money-making opportunity. Financial analysts estimated that mask sales in the first quarter of 2020 topped $74.90 billion.
Some countries, if not close to all, have made it mandatory to wear masks indoors. Do the math. A quick calculation reveals that the world will need close to seven billion masks coming into 2021.
The face mask market is projected to grow from USD 737 million in 2019 to USD 22,143 million in 2021 and then reduce to USD 3,021 million by 2025. Furthermore, the ongoing COVID-19 pandemic will drive the market of surgical masks from 2019 to 2021.
Curious to know how to tap into the profits from the face mask frenzy? Well, if you don't own a mask producing factory, you can buy face mask stocks.
Today, I will show you one company you just might want to invest in to tap this money-making opportunity.
Face Mask Stocks to Buy
- Are you looking for face mask stocks to buy? How would you do so? It's not like you can just look for face masks. However, there are the companies that make them that you can invest in. Let's take a look at one such company you can invest in.
1. 3M (NYSE: MMM)
From humble beginnings as the Minnesota Mining and Manufacturing Company in 1902, 3M offers over 60,000 products with a client base that spans the globe.
This well-established conglomerate has championed innovation, developing industry-first products keeping them well ahead of the competition.
$32 billion a year of products, that's how much 3M sells. From tapes and adhesives to medical equipment and psychedelic décor in Hong Kong's Cristal Bar, they've woven themselves into our daily life.
But what does the fundamental analysis say? Is this a buy for face mask stocks?
2. A Profitable Company
Over the decades, 3M stock price has risen by leaps and bounds. From $5.85 in 1968 to $236 at the beginning of 2020, they've seen their share price rise 40 times.
Granted, post-it notes and glue aren't the most exciting businesses, but they cash flow, and that's all that matters. For the first nine months of 2020, 3M's operating cash flow was $5.6 billion.
And once you subtract $1.1 billion for capital expenditures, you can clearly see there's lots left over to pay the $2.5 billion of dividends.
3. The Future Looks Bright for This Face Mask Stocks Company
It's no secret that the demand for masks is soaring, and so are prices. Wired magazine recently reported that a box of 20 3M particulate respirators has surged from $17 to $70 since the virus' outbreak.
Not surprisingly, with demand going up, suppliers such as 3M are preparing to boost production.
With the second wave on our heels, the government announced their plan to enter into a contract with 3M to produce 35 million more masks per month.
Although it's unclear if 3M will make them, they will be providing them, which means more sales and profits for them.
And just this past week, 3M shares were up 4.15%, changing hands at $169.79 each. This move bumps up their six month gain to approximately 32%.
Why You Should Consider Buying Stock in 3M
- Coronavirus and face masks aside, 3M really is an excellent business. Arguably, MMM is probably one of the US' most well-diversified companies. With a span of business from health care, office supplies to industrial goods, they are well diversified. To that end, 3M has made $7.7 billion worth of acquisitions in healthcare to boost growth. But that's not the only reason why you should buy shares in this face mask stock producer.
Let me introduce to you the main reason why I want to buy 3M shares...
Their dividend payout.
1. You Want to Buy This Face Mask Stocks Maker for Its Dividend
Arguably one of the main reasons to buy and hold 3M stock for the long haul is their dividend. For 62 years straight, the board of directors has raised the dividend payout.
At the current share price, the dividend yield is 3.46%. As you might expect, all those hikes add up to a considerable return on investment yield.
To put this in perspective, over the last 30 years, there have only been three other times when you could buy 3M stock for a 3.46% dividend yield: 1991, 2009 and right now.
While 3M stock could certainly get cheaper in the short-run, it looks like a good buy for your portfolio for long-term investors. If you want to bankroll your retirement, consider buying 3M.
However, if 3M is too pricey for you, some of the industry's major players are listed below.
Major Players in the Protective Face Mask Industry
- SPRO Medical
- Prestige Ameritech
- Owens & Minor
- 16771Japan Vilene
- CM, Hakugen
- Cardinal Health
- Molnlycke Health
- Shanghai Dasheng
- Te Yin
- Suzhou Sanical
- Essity (BSN Medical)
- Tamagawa Eizai
- Alpha Pro Tech
- Jiangyin Chang-hung
- Troge Medical,
I encourage you to explore them to decide if they are worthwhile to invest in. At Bullish Bears, we don't give you investment advice. That's why you must do your homework before spending your hard earned dollars.
Facemasks aren't going anywhere any time soon. In fact, many provinces and cities have made these accessories mandatory. That's a grim reality.
Investors may be underestimating the vast depth of the face mask market. For savvy investors, this could be your golden opportunity.
As millions stock up on face masks, I highly suggest you stock up on face mask stocks. Whether it's stock in 3M or any of the other companies listed above, don't let this opportunity pass you by.