June 27, 2025 a 03:31 pm
MMM: Dividend Analysis - 3M Company
3M Company has demonstrated a reliable dividend history, standing firm with 56 years of consecutive payments. However, recent issues, such as a negative CAGR over both 3 and 5 years, indicate challenges in maintaining growth. With a dividend yield of 1.94%, this may appeal to investors seeking stability over rapid growth, particularly considering its strong sectoral position.
📊 Overview
The dividend profile of 3M Company reflects its rich history in dividend payments and relative stability. Yet, recent results suggest a need for close monitoring as growth rates have negative trends.
| Attribute | Value |
|---|---|
| Sector | Industrial |
| Dividend yield | 1.94% |
| Current dividend per share | 3.60 USD |
| Dividend history | 56 years |
| Last cut or suspension | None |
📈 Dividend History
The history of dividends underscores 3M's commitment to rewarding shareholders, an appeal to long-term investors prioritizing stable income.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.46 |
| 2024 | 3.36 |
| 2023 | 5.02 |
| 2022 | 4.98 |
| 2021 | 4.95 |
📈 Dividend Growth
While historically robust, recent growth figures indicate a possible plateau, indicative of broader corporate challenges or industry shifts.
| Time | Growth |
|---|---|
| 3 years | -0.12% |
| 5 years | -0.07% |
The average dividend growth is -0.07% over 5 years. This shows moderate but steady dividend decline.
📉 Payout Ratio
Payout ratios provide insight into the sustainability of dividends. An EPS payout ratio of 44.87% suggests safe coverage, while the FCF payout ratio of -2806.65% raises concerns about the effectiveness of cash generation to sustain current dividends.
| Key figure | Ratio |
|---|---|
| EPS-based | 44.87% |
| Free cash flow-based | -2806.65% |
💼 Cashflow & Capital Efficiency
Strong cash flow metrics are critical for dividend coverage and operational efficiency. Negative FCF yield coupled with a high CAPEX to OCF is concerning, indicating capital-intensive operations potentially straining free cash.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 0.90% | 10.00% | 6.77% |
| Earnings Yield | 5.87% | -13.82% | 10.18% |
| CAPEX to Operating Cash Flow | 64.93% | 24.18% | 31.28% |
| Stock-based Compensation to Revenue | 1.18% | 0.84% | 0.77% |
| Free Cash Flow / Operating Cash Flow Ratio | 35.07% | 75.82% | 68.72% |
Overall, the results indicate fluctuating cash flow stability, highlighting challenges in aligning cash generation capabilities with operational needs.
🗣️ Balance Sheet & Leverage Analysis
Assessing leverage is paramount to understand the financial flexibility and risks. High debt-to-equity ratios reflect significant leveraging, demanding scrutiny of debt management strategies.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 355.52% | 350.61% | 109.68% |
| Debt-to-Assets | 34.26% | 33.32% | 34.87% |
| Debt-to-Capital | 78.05% | 77.81% | 52.31% |
| Net Debt to EBITDA | 1.67 | -1.62 | 1.44 |
| Current Ratio | 1.41 | 1.07 | 1.54 |
| Quick Ratio | 1.08 | 0.76 | 0.98 |
| Financial Leverage | 1037.69% | 1052.22% | 314.52% |
Analysis reveals a highly leveraged status that could impede financial flexibility, affecting long-term sustainability if unaddressed.
✅ Fundamental Strength & Profitability
Key performance indicators of efficiency and growth reflect operational effectiveness and potential growth avenues. Potential areas for improvement include maintaining consistent returns and optimizing margin control.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 108.62% | -145.52% | 39.11% |
| Return on Assets | 10.47% | -13.83% | 12.44% |
| Net Margin | 16.98% | -21.40% | 16.88% |
| EBIT Margin | 19.61% | -26.76% | 20.02% |
| EBITDA Margin | 19.62% | -20.65% | 25.48% |
| Gross Margin | 41.21% | 43.46% | 43.81% |
| R&D to Revenue | 4.42% | 5.64% | 5.44% |
Fundamental insights suggest the necessity for deliberate measures to improve asset productivity and bolster consistent profitability.
⚠️ Price Development
🔍 Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 1 | |
| Payout Ratio | 2 | |
| Financial Stability | 2 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 1 | |
| Balance Sheet Quality | 3 |
Total Score: 22/40
🗣️ Rating
3M Company holds a historic reputation for reliable dividends but faces contemporary obstacles in growth trajectories and leverage concerns. While dividend stability remains attractive, conservative investors should weigh these aspects against current yield viability. Overall, 3M Company is rated as moderate for dividend-focused portfolios, balancing historical assurance with present-day risks.