May was pretty bad for markets. The prices kept decreasing and my portfolio value shrank by ~€800 (~5%) in a single month. However, it presented some opportunities, as I am still in the early accumulation phase of the portfolio. I took the opportunity and initiated a new position.
This time, it is a dividend king that I decided to add to my portfolio. 3M raised their dividends for 61 years in a row. There are certainly not many companies in the world to achieve that. Shortly about the company:
3M Company (3M), incorporated on June 25, 1929, is a technology company. The Company is a manufacturer and marketer of a range of products and services. The Company operates through five segments: Industrial; Safety and Graphics; Health Care, and Consumer. 3M products are sold through various distribution channels, including directly to users and through a range of wholesalers, retailers, jobbers, distributors and dealers in a range of trades in various countries around the world.
If you haven’t heard about the company, you probably still used some of its products at some point. They are famous for their “scotch tape”, “Post-it” sticky notes etc.
In fact, 3M was one of the earliest companies I heard of when I got interested in dividend growth investing a few years ago. However, this dividend king was looking overvalued most of the time. This year the situation started to change and the price of 3M declined from the highs of $220 to as low as $160 at the start of June. The company missed their earnings and revenue forecasts and cut their EPS expectations for this year. Perhaps the company is not undervalued but I think it’s at least at fair value now. So I decided that it’s a good time to initiate a position if I want to have this dividend king in my portfolio.
Company fundamentals at the purchase price:
- P/E (TTM): 17.5
- Dividend yield: 3.49%
- Payout ratio: 57.30%
- Debt/Equity: 1.69
- Net Debt/EBITDA: 1.7
On the 5th of June I purchased 8 shares of MMM at $165/share for a total of $1327 (including commissions):
This adds $39.16 to my forward annual dividend income (after taxes). It puts me one step closer to reach my goal to receive €480 from passive income throughout the year.
Do you like 3M or do you think their glory days are in the past already? Do you have it in your portfolios? I would love to hear your thoughts!