3M Co. issued early Christmas gifts to stockholders Tuesday by issuing a better-than-expected 2014 forecast and increasing its quarterly dividend 35 percent.
The new dividend of 85.5 cents a share will be payable March 12 to shareholders of record as of Feb. 14. 3M said it will spend up to $10 billion on acquisitions through 2017 and repurchase as much as $22 billion of shares in the five-year period.
Delighted investors hoisted 3M’s stock by $3.73 a share to close at $131.39 Tuesday. The sharp increase is the latest bull run for the stock, which just a year ago stood at $93 a share.
CEO Inge Thulin said the plan “reflects our confidence in 3M’s future.” Since taking over 3M in February 2012, Thulin has increased spending on research and development, realigned business units and has begun shedding underperforming businesses.
“We are ready to move a little bit more aggressively,” Thulin said during a meeting with investors Tuesday.
Thulin also issued 3M’s year-end guidance for 2014. Earnings should hit $7.30 to $7.55 a share next year. Analysts had estimated that 2014 earnings might reach $7.40 a share on average.
Thulin said previously that full 2013 earnings are expected to reach $6.65 to $6.75 per share, while 2013 revenue is expected to grow 3 to 4 percent above the $29.9 billion reported for 2012.
In a statement Thulin said the actions prove 3M is serious about growth and that the timing is right. “The strength and diversity of our business model supports more aggressive capital deployment,” he said. “We are building the company for long-term success and are committed to creating sustainable value for our shareholders.”
Nigel Coe, an analyst with Morgan Stanley in New York, said 3M’s moves “represent a major shift in tone from this historically conservative team.”
Bloomberg News contributed to this report.