3M Joins the 3% Dividend Club in the Dow, With Dividend Hike and Huge Buyback

3M Co. (NYSE: MMM) has managed to recover handily from its lows of January. Still, its stock price is lower than it was at the end of 2015. Now 3M is trying to see if a larger dividend and stock buyback will be enough to entice new shareholders.

After Tuesday’s close, 3M said that its board of directors declared a dividend of $1.11 per common share for the first quarter of 2016. What matters here is that this constitutes an 8% dividend hike from the $1.025 prior payout seen during the last four quarterly payouts.

In a further effort to return more capital to shareholders, 3M said that its board of directors also authorized the repurchase of up to $10 billion worth of its outstanding common stock. The new plan replaces the prior plan and this new authorization has no pre-established closing date.

3M is no stranger to returning capital to its shareholders. It announced an impressive $12 billion share buyback plan back in 2014. 3M’s history at that time showed that it had spent $5.2 billion on buybacks in 2013, up from $2.2 billion in 2012.
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3M is no stranger to dividends either. The conglomerate confirmed in its release that it has paid dividends to its shareholders without interruption for more than 99 years. Perhaps equally as important and representative here is that 3M is a member of the S&P 500 Dividend Aristocrats, a list of S&P 500 stocks that have increased dividends for at least 25 consecutive years.

More proof that 3M is willing to return capital is that it has returned $46 billion to shareholders via dividends and share repurchases just in the past 10 years. As of the end of 2015, 3M had 609,330,124 common shares outstanding and 84,808 shareholders of record.

Despite an earnings issue last month, 3M analysts are currently higher than they were at the start of 2016 in the 3M bullish and bearish outlook in 2016, versus other conglomerates.

3M shares closed at $147.87 on Tuesday. Its consensus analyst price target was last seen at $160.13, and its 52-week range is $134.00 to $170.50.

3M’s market cap is roughly $90 billion, and the new dividend yield, based on the $147.87 close, will be exactly 3.00%.