3M increases cash dividend
On January 25, 2018, 3M (MMM) announced a dividend for 1Q18. MMM increased its regular quarterly cash dividend by 15.8%. It will pay a dividend of $1.36 per share in 1Q18 as compared to $1.18 in 1Q17. The dividend will be paid on March 12, 2018, to shareholders on record as of February 16, 2018. The dividend is expected to be paid on March 12, 2018.
3M has outstanding common shares of 613.4 million, which means MMM will be paying $834.2 million in dividends. The dividend increase has pushed the dividend yield up. As of January 26, 2018, MMM’s dividend yield stands at 2.1%. Inge Thulin, 3M’s chair, president, and chief executive officer, said, “A strong, steady and rising dividend is a hallmark of our enterprise. This increase reflects confidence in our ability to continue generating premium returns in 2018 and beyond.”
Stock price update
Riding on the good 4Q17 earnings and the dividend increase, MMM stock made good gains of 4.2% and closed at $258.63 for the week ended January 26, 2018. The stock ended at an all-time high and traded 13.0% above the 100-day moving average price of $228.70, indicating an upward trend in the stock. However, investors should be careful, as its 14-day relative strength index is at 80, which means that the stock has moved into the overbought position temporarily. The short interest as a percentage of outstanding shares is at 1.5% and moved up 1.2% at the end of December 2017, which indicates that the bearish sentiment is developing for MMM.
Investors can indirectly hold MMM by investing in the SPDR Dow Jones Industrial Average ETF (DIA), which invested 6.6% of its portfolio in 3M. The fund also provides exposure to Boeing (BA), Goldman Sachs (GS), and Caterpillar (CAT), which have weights of 8.8%, 6.9%, and 4.3%, respectively, as of January 26, 2018.