In This Article:
Delving into the Dividend Dynamics of 3M Co
3M Co (NYSE:MMM) recently announced a dividend of $1.5 per share, payable on 2023-12-12, with the ex-dividend date set for 2023-11-16. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into 3M Co's dividend performance and assess its sustainability.
What Does 3M Co Do?
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3M is a multinational conglomerate that has operated since 1902, when it was known as Minnesota Mining and Manufacturing. The company is well known for its research and development laboratory and it leverages its science and technology across multiple product categories. As of 2020, 3M is organized into four business segments: safety and industrial, transportation and electronics, healthcare, and consumer. Nearly 50% of the company's revenue comes from outside the Americas, with the safety and industrial segment constituting a plurality of net sales. Many of the company's 60,000-plus products touch and concern a variety of consumers and end markets.
A Glimpse at 3M Co's Dividend History
3M Co has maintained a consistent dividend payment record since 1959. Dividends are currently distributed on a quarterly basis. 3M Co has increased its dividend each year since 1959. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 64 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down 3M Co's Dividend Yield and Growth
As of today, 3M Co currently has a 12-month trailing dividend yield of 6.31% and a 12-month forward dividend yield of 6.32%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, 3M Co's annual dividend growth rate was 1.10%. Extended to a five-year horizon, this rate increased to 4.30% per year. And over the past decade, 3M Co's annual dividends per share growth rate stands at 10.00%. Based on 3M Co's dividend yield and five-year growth rate, the 5-year yield on cost of 3M Co stock as of today is approximately 7.79%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, 3M Co's dividend payout ratio is 0.00.