As 24/7 Wall St. had previously predicted, there were a couple more significant dividend hikes in December within the Dow Jones Industrial Average (DJIA) stocks. Both 3M Co. (NYSE: MMM) and Boeing Co. (NYSE: BA) increased their dividends.
3M is set to have its 2015 annual outlook meeting on December 16, 2014. This was the platform for its dividend payout hike announcement last year. The dividend was raised by 20% to a total of $1.025 per share for the first quarter of 2015, which will be payable in March of 2015. In 2013, 3M had a dividend hike of 35%.
As 24/7 Wall St had previously stated, we simply did not expect a repeat of the same going into 2015. On December 1, our outlook was for 3M’s dividend hike to move up to $0.90 to $0.95 from $0.855 per share now. In short, this was much better than expected.
It is worth noting that 3M had previously announced a $12 billion stock buyback program in February. As of November 28, 2014, 3M had over 636 million common shares outstanding, and as of December 12, 2014, the company had 88,013 shareholders of record.
Shares of 3M closed down less than 1% to $156.85 in Monday’s trading session. The stock has a consensus analyst price target of $156.14 and a 52-week trading range of $123.61 to $162.92.
Looking at Boeing, December has been when it has historically hiked its dividend for the past three years. It had a December 3 presentation at a Credit Suisse conference. While we did not have any formal dates for this, Wells Fargo predicted that the dividend hike announcement would come after the close on December 15.
Boeing announced that it would increase its quarterly dividend by 25% to $0.91. We had predicted that the current payout of $0.73 per quarter would likely be raised to $0.80 per share, or perhaps as much as $0.85 per share. Boeing also blew out our expectations.
At the same time as the dividend hike, Boeing authorized a $12 billion share repurchase program. The repurchase activity for 2014 is complete at $6 billion and is expected to resume in January. In the previous year, Boeing’s dividend hike was massive at 50%. The new Boeing dividend represents an increase of 88% over the past two years. Here is what potentially could make Boeing the best DJIA stock of 2015.
The chairman and chief executive of Boeing, Jim McNerney, stated:
Strong operating performance across our business continues to generate significant cash flow and financial strength for Boeing,” said McNerney. “That strength, coupled with the solid growth outlook for commercial aviation and Boeing’s unmatched product and services portfolio, provides us with the foundation to continue our balanced cash deployment strategy, investing in our core programs while increasing shareholder value.
Shares of Boeing closed up 1% at $122.08 on Monday and gained another 1% to $123.50 in Tuesday’s premarket trading. The consensus analyst price target is $149.10, and the 52-week trading range is $116.32 to $144.57.
Two more DJIA stocks have come out swinging with dividend hikes — and by far higher than what most investors should have expected.