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3M's (MMM) Board Okays 2% Hike in Quarterly Dividend Rate

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3M Company (MMM - Free Report) on Tuesday Feb 4 announced that it is rewarding its shareholders with a hike in quarterly dividend rate. This increment marks the company’s 62nd consecutive year of dividend raise.

We believe that such shareholder-friendly policies underline the company’s strong cash position and commitment toward returning high value to its shareholders.

Inside the Headlines

As announced, 3M’s board of directors approved a hike of 2% or 3 cents per share in the quarterly dividend rate, which now moved up from $1.44 to $1.47. On an annualized basis, the dividend increased to $5.88 per share from $5.76.

3M will pay the revised quarterly dividend on Mar 12, 2020 to its shareholders of record as of Feb 14.

Sound Shareholder-Friendly Policies

The company firmly believes in rewarding its shareholders handsomely through dividend payments. Its cash dividend payout increased from $4.70 per share in 2017 to $5.76 in 2019. It paid out cash dividend of $3,316 million to its shareholders last year.

Additionally, the company bought back shares to reward its shareholders. In 2019, it repurchased $1,407 million shares.

Zacks Rank, Earnings Projections and Price Performance

With a market capitalization of $90.1 billion, 3M currently carries a Zacks Rank #3 (Hold). The company is poised to gain from restructuring actions, solid product portfolio, acquisitions, divestments and investor-oriented strategies. However, softness in the Asia Pacific and EMEA markets, weakness in electronics business, high tax rates, huge debts and forex woes are concerning.

For 2020, 3M anticipates earnings of $9.30-$9.75 per share and sales improvement by 3-5% year over year. Net cash generated from operating activities is expected to be $6.9-$7.6 billion while free cash flow is predicted to be $5.1-$6 billion.

Earnings estimates for 3M have been lowered in the past 30 days. Currently, the Zacks Consensus Estimate for earnings is pegged at $9.51 for 2020 and $10.07 for 2021, indicating a dip of 1.3% and 1.5% from the respective 30-day-ago figures.

3M Company Price and Consensus

3M Company Price and Consensus

3M Company price-consensus-chart | 3M Company Quote

In the past three months, the company’s stock price has decreased 9.6% against the industry’s growth of 4.1%.

Stocks to Consider

Some better-ranked stocks are Graco Inc. GGG, Barnes Group, Inc. B and Tennant Company TNC. While Graco currently sports a Zacks Rank #1 (Strong Buy), Barnes and Tennant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for these companies have moved north for the current year. Further, average four-quarter positive earnings surprise is 0.40% for Graco, 4.21% for Barnes and 28.65% for Tennant.

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