This article is about 3M (MMM) and why it’s a buy for the total return investor and dividend growth investor. 3M is a company that manufactures and sells industrial and medical products in the United States and in foreign countries. I have had comments on previous articles about why I compare performance to the Dow average, so just for fun I will look at other Dow companies and see how they perform. The first is 3M, and it’s a winner. I use the Dow because 6 of the companies in the Good Business Portfolio are in the Dow and they got there by being good businesses.
Fundamentals of 3M will be reviewed in the following topics below The Good Business Portfolio Guidelines, Total Return and Yearly Dividend, Last Quarter’s Earnings, Company Business and Takeaways And Recent Portfolio Changes.
I use a set of guidelines that I codified over the last few years to review the companies in The Good Business Portfolio (my portfolio) and other companies that I am taking a look at. For a complete set of the guidelines, please see my article “The Good Business Portfolio: Update To Guidelines and July 2016 Performance Review“. These guidelines provide me with a balanced portfolio of income, defensive, total return and growing companies that hopefully keeps me ahead of the Dow average.
Good Business Portfolio Guidelines.
3M passes 11 of 11 Good Business Portfolio Guidelines a really excellent score, a good score is 10 or 11. These guidelines are only used to filter companies to be considered in the portfolio. Some of the points brought out by the guidelines are shown below.
3M easily meets my dividend guideline of having dividend increases for 7 of the last 10 years and has a good growing dividend over a long period of time with the dividend being safe. 3M is therefore a choice for the dividend growth investor. The average 5 year earnings payout ratio is low at 44%. After paying the dividend, this leaves cash remaining for investment in expanding the business by buying bolt-on…