We have received US$64.50 (59.89 shares x US$1.175) from 3M (MMM). The firm increased its dividends this quarter to US$1.175 dividends per share, up by US$0.065 from last quarter. We are expecting that 3M will be paying US$1.175 dividends per share for the next three quarters. Within Q42016, stock price rose by approximately +10% as it announced to divest its Traffic and Security segment and Safety Eyewear Prescription division. It is expected that sales of these businesses will be reflected in Q1 and 1H of 2017.
The increasing stock price has been pushing down dividend yield. The dividend yield is +2.3%. Since Q32016, the dividend yield is on a downward trend and is near to a 2 year low.
The payout ratio is 0.50. The payout ratio is too high versus its historical figures. Despite the high payout ratio, we expect that the company will still be able to pay dividends but it may increase its dividend at a lower growth rate.
Dividend growth rate has reported large growth rate in 3yrs and 5yrs period. In 1 yr period, the growth rate is +8.30% which is near the 10yr period growth rate at +9.10%.
The company has a paying dividends to its shareholders for 100 years and has been increasing dividends for 59 consecutive years. 3M has been paying dividends since 1986. Despite a decreasing dividend yield and high payout ratio, we foresee that 3M will still be paying dividends in the near future however, the dividend growth rate might be between +7% to 8.5%.