3M (MMM) and Dover (DOV) are both tremendous dividend growth stocks. They are both Dividend Aristocrats, and Dividend Kings as well.
The Dividend Aristocrats Excel spreadsheet has 51 stocks with 25+ consecutive years of dividend increases.
3M and Dover have increased their dividends for 59 years and 61 years in a row, respectively.
Both are Dividend Kings, an even more exclusive group of dividend growth stocks.
The Dividend Kings Excel spreadsheet has just 19 stocks, each with 50+ years of consecutive dividend increases.
Both 3M and Dover have strong businesses, and leadership positions in their respective industries.
This article will discuss which of these two Dividend Aristocrats is the better buy, if investors had to choose one.
Business Overview
Winner: 3M
3M and Dover are both large industrial manufacturers, but they serve different product and geographic markets.
3M generated more than $30 billion of total revenue in 2016. Its revenue is split among five segments:
Source: Bernstein Strategic Decisions Conference, page 5
Dover operates four segments:
Both 3M and Dover are high-quality businesses. However, 3M outperformed Dover in 2016.
Dover’s organic revenue declined by 5% for the year. Diluted earnings-per-share for the year came in at $3.25, down 13% from 2015.
Weakness was pronounced in the company’s oil and gas markets. Energy segment revenue fell 9% in the fourth quarter, and 25% for the year.
Source: 2017 First Quarter Presentation, page 5
3M had a much better year in 2016. Four out of the company’s five segments posted organic revenue growth.
However, 3M was more affected by the strong U.S. dollar.
3M’s 2016 organic revenue declined just 0.1% for the year, a better performance than Dover. Earnings-per-share rose 7.7%, thanks to margin improvements.
