Quick Read
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3M (MMM) qualifies as an income stock again: its dividend uses about 34% of 2026 earnings guidance, and raises have resumed after the spinoff cut.
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Emerson (EMR) pays out about 34% of free cash flow, the same share as 3M, after raising its dividend 7%.
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Buybacks of $3 billion this year dwarf dividends, while PFAS payments of $1 billion in one quarter still drain 3M's cash.
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3M Company( NYSE:MMM ) held Dividend King status for decades. It ended that run by cutting its payout after the 2024 spinoff of Solventum. Since then, the dividend has been raised twice, the company has left manufactured PFAS, and on November 3, it announced a broad resolution of its AFFF personal injury litigation. For retirees, the question now is whether 3M has earned its place as an income holding again.
From $1.51 to $0.78: How 3M Rebuilt Its Payout
3M paid $1.51 per share in February 2024. By May 2024, after the spinoff, the quarterly dividend was $0.70. It rose to $0.73 in 2025 and now stands at $0.78, up about 6.8%. Total dividend cash fell from $3.311 billion in 2023 to $1.175 billion in 2025.
On the same day as the legal settlement, the board declared its latest dividend and approved a $6 billion share repurchase authorization. The stock is up 18.46% this year to $187.02.
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Coverage Looks Comfortable After Raised Guidance
At the current rate, 3M pays $3.12 per share per year. That works out to a yield of about 1.67% and around 34% of the low end of 2026 adjusted EPS guidance, which was raised to $9.10 to $9.15. Cash coverage tells a similar story. In the first nine months, dividends took $1.2 billion out of $3.1 billion of free cash flow, or about 39%. Full-year free cash flow guidance is about $4.8 billion.
On the October call, the CFO, Anurag Maheshwari, explained the third-quarter cash flow:
"Free cash flow was $1.2 billion in the quarter, as higher earnings were offset by working capital timing, which we expect to reverse in the fourth quarter."
CEO William Brown called the quarter "another quarter of strong results, including solid sales growth, continued margin expansion, double-digit EPS growth, and robust free cash flow."
Buybacks and PFAS Still Get the Bigger Share of Cash
So far this year, 3M has spent $3.2 billion on share repurchases, well above what it paid in dividends. PFAS remains a large drain on cash. Net pre-tax PFAS payments were $3.5 billion in 2025 and $1 billion in the third quarter alone. That payment helped drive third-quarter operating cash flow down 72.32% to $486 million. Bloomberg reported that with this latest settlement behind it, 3M is focusing on its data center business.
How Emerson and Honeywell Stack Up
Emerson Electric( NYSE:EMR ) is a model regular payer. On November 4, it raised its quarterly dividend 7% to $0.595. For fiscal 2027, it plans about $1.3 billion in dividends against free cash flow of $3.8 billion to $3.9 billion. That is around 34%, about the same share 3M pays out.
Honeywell International( NASDAQ:HON ) is still settling into its new shape after spinning off its aerospace business on June 29, 2026. It projects about $2.1 billion of free cash flow this year. CEO Vimal Kapur said the company is "raising our full-year 2026 outlook."
Verdict: 3M Qualifies as an Income Stock Again
Yes. 3M is an income stock again, though a growth-and-income one. The yield is low, but earnings and free cash flow cover the payout with room to spare; the increases have resumed, and the biggest legal uncertainty now has a framework for resolution. The stock trades at about 20 times forward earnings. Next, watch whether the expected fourth-quarter working capital reversal shows up, how the settlement payments are scheduled, and how big the next raise is.
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