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3M’s Dividend Yield Is Steady: Could It Increase?

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Aug. 31 2018, Updated 9:31 a.m. ET

3M’s dividend yield

As of August 30, 3M’s dividend yield was at 2.60%, which shows signs of stabilization. The company witnessed a continuous decline in the dividend yield from the third quarter of 2015 until the fourth quarter of 2017. Stanley Black & Decker (SWK), Caterpillar (CAT), and Deere (DE) have dividend yields of 1.8%, 2.4%, and 1.9%, respectively. 3M’s dividend yield is stronger than these peers.

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3M’s dividend yield trend

Since 2012, 3M’s dividend yield has been fluctuating by 1.8%–2.9%. 3M’s dividend yield touched a high of 2.9% in the third quarter of 2015. Since then, the dividend yield has fallen due to an increase in the stock price. The increase in the dividend rate didn’t help the falling dividend yield. In 2018, the dividend yield showed signs of an improvement. 3M’s stock price declined from the all-time high of $258.6.

Since 3M made a downward revision to its EPS for fiscal 2018, analysts have projected a limited upside for the stock from its current price of $210.58. 3M’s dividend yield might not fall more for some time. However, 3M’s current dividend yield of 2.6% is better than the yield generated from the one-year Treasury bonds. Long-term investors who look for higher dividend yields in 3M have an alternative investment option.

Investors could hold 3M indirectly by investing in the Dow Jones Industrial Average ETF (DIA). DIA invests 5.5% of its holdings in 3M as of August 30.

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