3M Boosts Dividend Payout, Stock Repurchase Plan

By
A A A

With S&P 500 companies expected to boost dividend payouts by 10.4% to a record total of $310 billion this year, 2013 has been a good year for income investors.

Diversified industrial giant3M ( MMM ) is just one of the big caps focusing on shareholder returns lately. On Dec. 18, the St. Paul, Minn.-based company increased its quarterly dividend for the first quarter of 2014 by 35% to 85.5 cents.

It also lifted its five-year stock repurchase program to $17 billion-$22 billion from $7.5 billion-$15 billion. The company forecast 2014 earnings at $7.30-$7.55, with the midpoint above consensus views for $7.40. Shares rallied 4% that day.

Quarterly cash dividends have been paid for more than 97 years in a row and 3M has increased the payout amount for 55 consecutive years. It offered a quarterly dividend of 63.5 cents a share in 2013, up 8% from the prior year.

Based on the 85.5 cents 3M will pay out, its annualized yield is about 2.5%, slightly above that of the S&P 500.

Earnings dipped 1% in the first quarter this year, but recovered with 3% and 8% growth in Q2 and Q3 respectively. Analysts expect Q4 profit gains of 14%.

The three-year Earnings Stability Factor is a very stable 1 on a scale from 0 to 99 for 3M. Its five-year factor is 7. Its annual profit stumbled in 2009 but recovered and resumed growth in 2010. Consensus estimates call for EPS to rise 5% this year and 11% the next.

The provider of industrial tapes and adhesives, medical supplies, office products and surveillance gear is geographically diversified. The U.S. accounted for 35% of revenue last year, Asia Pacific 30%, Europe/Middle East/Africa 23%, and Latin America and Canada 12%.

The stock tends to be a slow and steady performer over time, but has outperformed the overall market this year. It's surged 47%, well ahead of S&P 500's 28% gain.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: MMM

Investor's Business Daily

Investor's Business Daily

More from Investor's Business Daily:

Related Videos

Stocks

Referenced

77%

Most Active by Volume

111,864,163
  • $3.91 ▲ 2.36%
76,404,746
  • $7.37 ▼ 5.03%
66,680,057
  • $15.25 ▼ 2.12%
61,293,760
  • $30.55 ▼ 6.09%
56,394,825
    $23 unch
55,005,642
  • $95.60 ▼ 2.60%
47,372,853
  • $95.02 ▼ 2.02%
44,783,481
  • $45.19 ▼ 2.40%
As of 7/31/2014, 04:07 PM