Dividend Aristocrat Overview: 3M

About 3M

3M was formed in 1902 as the Minnesota Mining and Manufacturing Company to mine what was hoped to be a mineral deposit for wheel-grinding abrasives.  The mine turned up empty of valuable minerals but the company persevered, moving headquarters twice and eventually settling in St. Paul, MN.  Over time, the company has developed technologies and applied them to products for industrial and household use across five business segments: Consumer, Electronics and Energy, Health Care, Industrial, and Safety and Graphics.  Popular brands include Post-It®, Scotch®, Scotch-BriteTM, ScotchgardTM, and NexcareTM.

The Minnesota Mining and Manufacturing Company officially changed its name to 3M in 2002.

3M is not only a member of the S&P 500, it is one of 30 companies that are part of the Dow Jones Industrial Average.

3M’s Dividend and Stock Split History

MMM announced a 35% increase in their dividend payout in December 2013, increasing the quarterly dividend from 63.5 to 85.5 cents.  MMM has been a dividend aristocrat since 1984 and 2014 marks the 55th consecutive year of dividend increases for MMM. MMM initiated dividends in 1916, when it paid out a 6 cents per share.  In recent history, MMM has announced dividend increases in the first quarter of the calendar year.

The 2014 dividend increase of 35% is the largest increase for the company since at least 1978.  MMM usually increases dividends by less than 10%.  Exceptions to this (in addition to 2014) include a 16.7% increase in 2005 and a 10.4% increase in 1997.

MMM has compounded its dividend at annual rates of 4.9% and 6.8% in the 5 and 10-year periods ending in 2013.  Since becoming a Dividend Aristocrat in 1984 and through 2013, MMM has compounded its dividend at an annual rate of 6.4%.  Including 2014’s dividend increases the annual compound rate to 7.2%.

3M has split 10 times since its incorporation as Minnesota Mining and Manufacturing Company in 1902.  Seven of these splits came after MMM was listed for trading on the NYSE in 1946: 2 for 1 splits in May 1956, May 1972, May 1987, March 1994, and September 2003, a 3 for 1 split in May 1960, and a 4 for 1 split in January 1951.  Prior to 1946, 3M split 2 for 1 in December 1920, December 1922 and November 1945.  Each share of 3M owned at its formation in 1902 would now be 3,072 shares and the 6 cent per share dividend would now be $10,506.24.

Direct Purchase and Dividend Reinvestment Plans

3M does not offer a direct investment plan but does offer a dividend reinvestment plan, which is administered through Wells Fargo Shareholder Services.  3M pays all purchase fees associated with the dividend reinvestment plan.  The investor is responsible for paying fees when selling shares through the plan.  Once enrolled in the plan, investors can purchase additional shares directly with a very low minimum of $10.

Investors interested in participating in the dividend reinvestment plan must own their shares directly, and not in “book form” through a broker.  Investors that own shares through a broker must direct their broker to transfer the shares to Wells Fargo Shareholder Services for registration through the plan.  If investors own shares in certificate form, those shares must be transferred into the plan.  Specific information on how to do this is available at http://www.shareowneronline.com.

Helpful Links

3M Investor Relations

Current quote and financial summary (finviz.com)