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Diversified technology conglomerate
3M Company ( MMM - Analyst Report) has recently increased its dividend payout by 7.6% year over year to a quarterly payment of 63.5 cents per share or $2.54 on an annualized basis. The first quarter 2013 dividend is payable on Mar 12 to shareholders of record as of Feb 15.
The current dividend hike is the 55th consecutive annual dividend increase for the company and the 99th uninterrupted yearly dividend payment. Based on the closing price of $101.49 as of Feb 4, 2013, the proposed dividend affirms a yield of 2.50%.
In addition, 3M also authorized a new share repurchase program, whereby it could repurchase shares worth $7.5 billion over a period of time. At year-end 2012, the company had approximately 687 million shares outstanding.
3M has consistently returned significant cash to its shareholders. The company had reportedly returned $32 billion to its shareholders in the last 10 years through a combination of dividends and share repurchase transactions, accounting for about 89% of the reported net income.
The recent dividend hike follows strong quarterly and annual results that helped the company to reiterate its earlier guidance for full year 2013 with an organic local-currency sales growth of 2%-5%. 3M delivered record fourth quarter 2012 sales with an improved performance by almost all the segments, except Safety, Security and Protection Services segment. For full year 2012, 3M also reported record total sales of $29.9 billion compared to $29.6 billion in 2011.
The company also has a healthy liquidity position. Cash and cash equivalents at year-end 2012 were relatively strong at $2.9 billion, while free cash flow for the three-month period was stable at $1.2 billion.
Moving forward, 3M has been continuously upgrading its product portfolio to fight against stiff competition from leading players such as QLogic Corp. ( QLGC - Analyst Report) and Broadcom Corp. . The company currently has a Zacks Rank #3 (Hold). However, we have a Zacks Rank #2 (Buy) for Tyco International Ltd. ( TYC - Analyst Report) , one of the peers of 3M.