3M Company

The company for researchers & inventors

The innovation machine 3M Company is a true problem solver. At home and at work alike, 3M brands are everywhere. Whether it's Scotch tape, the beloved Post-it notes, water filters or diaper fasteners, all of these are products from the company based in Minnesota, USA.

But the huge conglomerate has a lot more to offer. All in all, 3M Company currently employs over 8,000 researchers who have registered more than 100,000 patents. And there's no end in sight. The company invests over $1 billion a year in research and development.

The history and business model of 3M Company

In 1902, "Minnesota Mining and Manufacturing," or 3M Company for short, was founded. It all started with sandpaper. But thanks to keeping their eyes open and always having an ear to the customer, the researchers knew exactly what people needed. And so the product range kept growing, and many more areas were added, such as adhesives or thermal insulation.

Today 3M sells around 60,000 products - in pretty much every business area you can think of. For example, the company is also one of the world's leading suppliers of disposable medical products for hospitals. For infection control there are surgical gowns & face masks, and bandages and dressings are used for wound care. Even the well-known Littmann stethoscopes come from 3M.

The inventor company is also well represented in industry. Wherever there's welding, painting and gluing going on, 3M usually has a hand in it. Safety goggles, abrasives and structural adhesives, just to name a few. In that area you simply can't get around this giant.

What does the future of 3M Company look like? Can the dividend keep being raised?

Nobody can really say what exactly the future will bring. Fact is: hardly any other company is as broadly diversified as 3M Company. Whether in industry, medicine, automotive or technology, the company always delivers the right brand-name products. Its innovative researchers will keep filing patents and bringing new products to market. And that will keep revenue growing. The stock price should then keep climbing as well.

What about the dividend

3M Company is also one of the coveted Dividend Kings, since it has been paying a steady dividend since 1916. And it has been raised continuously for over 60 years. The current dividend yield is around 2.6%. That doesn't sound like much at first, but when you consider that it will most likely be raised every year, it gets a lot more lucrative. And if you then reinvest the dividends you earn, you can benefit from some pretty decent compounding over the long run.

Conclusion

3M Company belongs in every internationally oriented stock portfolio. Especially when stocks are falling, you should consider the chance to get in or buy more. In the long run you can hardly go wrong with this jack-of-all-trades.

Update: 04/28/2019 - Why the sudden drop of almost 13 percent?

Oh dear, what happened there? When I was going through the news I'd missed on Friday morning, I quickly came across the news about 3M. Within a single day the stock fell by almost 13 percent. The reason was the quarterly report from the evening before. Management lowered its guidance - to be more precise: adjusted earnings per share were cut by about $1.12. Revenue is also expected to decline by 1-2%. One cause is the strong dollar, which shrinks profits from abroad. On the other hand, 3M also has cyclical segments that have been doing noticeably worse lately. By the way, this is explained really well in this video here. In my view, nothing changes for long-term investors for now. On the contrary - the drop can be used as an opportunity to buy more. And by the way, the dividend was raised again.