3M Completes My Dividend Yield Passive Income Portfolio

Despite the small correction within the financial markets, the asset prices for high-quality dividend growth stocks are still high. We need a bigger correction to get back to normal prices but the current forces are too strength. It’s a process of valuation adjustments – stock yields come down to bond yields.

Last Friday, I put 15 shares of the industrial conglomerate 3M (MMM) into the Dividend Yield Passive Income (DYPI) Portfolio. I bought the company at 110.27 which resulted into a total purchase amount of $ 1,654.05. Below is a graph of the latest earnings and dividend developments from the recent five years.


3M Company is a diversified technology company with a presence in the industrial and transportation; health care; consumer and office; safety, security and protection services; display and graphics, and electro and communications businesses. 3M manages its operations in six business segments: Industrial and Transportation; Health Care; Consumer and Office; Safety, Security and Protection Services; Display and Graphics, and Electro and Communications.

MMM is also not cheap but compared to other dividend champions lower valuated. The current P/E amounts to 17.42 while the forward P/E is calculated at 15.02. Investors get a yield of 2.30%.




The 3M position is the eleventh biggest position within the DYPI-Portfolio. The portfolio has now 34 constituents and was funded on October 04, 2012. I plan to purchase each week one stake at cost between $1 to $2k. As a result, the cash reduced from $100k to $51. It’s a strategy of slow purchase and if the markets go further strong up, I need to close my acquisition process and rest on cash. The current valuation is too high to get good long-term yields.

What happened with my current holdings? They realized a gain of 10.24 percent. Because of the high cash amount (around 50 percent of the portfolio is still not invested), the portfolio performance life-to-date amounts to 5.46%.

The new stake will give me around $37 bucks per year in additional dividend income. The full year estimated passive dividend income is now at $1,718.

Here is the income perspective of the portfolio: