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How 3M Shows Value with Dividend Increases for 58 Years

3M has outpaced the overall market for 25 years.

Image via Mike Mozart/Flickr CC

Stocks are getting close to the levels that often kill bull markets; happily, select stocks are valued below their fundamental worth; right now, value is where it’s at, and that’s where we are too, asserts Jim Powell, editor of Global Changes & Opportunities Report.

3M Company (MMM) — formerly Minnesota Mining & Manufacturing — is an under-appreciated and undervalued company stock that has outpaced the overall market for 25 years. 3M has also paid an annual dividend for over a century, and increased it every year for the past 58 years. That’s quite a record.

3M doesn’t make flashy products, which is part of its problem on Wall Street. The company produces mundane items such as Post-Its and Scotch Tape.

MMM also makes industrial glues, reflective materials for signs, disposable medical supplies, and dozens of other necessary products — none of which bring throngs of cheering consumers to huge presentation halls for “unveilings.”

I don’t think any 3M products even light up. However, the company’s products are quite profitable — especially since most of them must be replaced every few months. Margins are also high because the company doesn’t need to fund the expensive R&D programs that electronic products require. It’s a great business.

3M is not the traditional value stock; its fundamentals are stronger. However, I think the company is selling well below where it should be.

I know from my nearly 55 years in the investment business, that investors rarely overlook unrealized value for very long. 3M is overdue for a nice catch-up rally.

Since 3M has such a long history of success — and with sharing its profits with investors — I think you should add the stock to your long-term portfolio.

Jim Powell is the principal analyst at Global Changes & Opportunities Report.

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