3M Stock Drives Its Value by Prioritizing Its Dependable Dividend

3M Company (NYSE:MMM) is growing its FCF very well, and as a result, MMM stock is likely to move up at least 44% over the next or so. Right now 3M pays a dividend of $5.88 per share, which is well covered by its free cash flow, as I mentioned in a recent article. Moreover, this represents about a 4% dividend yield, but the stock has had a lower average dividend yield of just 2.78% over the past four years.

Management reiterated this stance in its earnings call discussion on the dividend, saying “Our first priority is to invest in our business second, maintaining our dividend and lastly flexible deployment for M&A and share repurchases.” This makes it very clear the 3M is here to stay. So, using the average dividend yield of the past four years, I estimate the stock is worth $211.55, or 44.4% higher than today. So I believe MMM represents good value for the patient, long-term investor.

Source: InvestorPlace

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