10 Best Innovative Stocks that Pay Dividends

5. 3M Company (NYSE:MMM)

Number of Hedge Fund Holders: 66

An American multinational conglomerate, 3M Company (NYSE:MMM) ranks fifth on our list of the best innovative stocks that pay dividends. Earlier this year, the company made a significant shift by spinning off its healthcare division and reducing its dividend by 50%. Investors reacted negatively to the dividend cut, especially since the company had maintained a 66-year track record of consistent dividend growth before making this decision.

Despite the negative reactions, this situation may have been a blessing in disguise for 3M Company (NYSE:MMM), as the dividend cut has proven beneficial. The stock has surged by an impressive 44% in 2024 so far, driven by the company’s stable earnings in recent reports. In the second quarter of 2024, it reported revenue of $6.2 billion, which although fell by 25% from the same period last year, beat analysts’ estimates by $425.8 million. In the recent earnings report, the company’s CEO emphasized three main priorities: achieving consistent organic revenue growth, enhancing operational efficiency, and strategically allocating capital. He expressed his long-standing admiration for 3M’s history of innovation and his enthusiasm for leading the company and the opportunities that lie ahead.

3M Company (NYSE:MMM) is famous for creating the iconic Post-it Notes, now a staple in offices, schools, and homes globally. It also invented Scotch tape in 1930, originally developed for sealing cellophane food packaging. This clear adhesive tape quickly became popular due to its versatility, being used for everything from gift wrapping to everyday household tasks.

In addition to strong sales, 3M Company (NYSE:MMM)’s cash position was also in place. In the most recent quarter, the company generated an operating cash flow of $1 billion and its free cash flow amounted to $1.2 billion. Despite reducing its dividends, the company remained committed to its shareholder return, paying $786 million to investors through dividends and share repurchases in Q2 2024. It offers a quarterly dividend of $0.70 per share and has a dividend yield of 2.10%, as of September 18.

According to Insider Monkey’s database of Q2 2024, 66 hedge funds owned stakes in 3M Company (NYSE:MMM), up from 64 in the preceding quarter. These stakes are worth over $3.1 billion in total. With 4 million shares, Millennium Management was the company’s leading stakeholder in Q2.