If you invest in a Dividend Aristocrat then you've likely grown accustomed to annual rate hikes. And for Dividend Kings, which have increased their payouts for more than 50 years in a row, it would be a shock if they suddenly stopped. 3M Company (NYSE:MMM) falls into the category of a Dividend King and earlier this month it announced it would be increasing its dividend payments for a 63rd year in a row. With a quarterly dividend of $1.48, it's a modest 1% hike from last year just to keep the streak going.
Today, 3M pays investors 3.3%. If you were to invest $50,000 into this stable stock, you'd be earning about $1,650 per year just in dividend income. It's a decent payout and a great way to add to the long-term returns you can enjoy from owning the stock. Over 10 years, its share price has doubled. And the company could continue to generate strong returns especially as demand for masks, personal safety, and cleaning items are on the rise.
3M is coming off a strong fourth quarter which saw its sales rise 5.8% year over year, up to $8.6 billion. Strong growth numbers aren't the norm for the company and investors shouldn't expect it from 3M.
But as long as the coronavirus pandemic is impacting global economies, demand for its products could spike and lead to some better-than-usual returns over the near term.
For long-term investors, this is a great buy-and-hold stock that is a much better alternative to holding money in a bank account. With a decent yield and lots of stability, it's an investment you can put in your portfolio and forget about.
