Feb. 8 (Bloomberg) -- 3M Co., the maker of Post-It Notes and films to brighten TV screens, approved a stock-repurchase plan of as much as $7 billion and increased its quarterly dividend by 5 percent.
The dividend will rise to 55 cents a share from 52.5 cents, payable March 12 to shareholders of record on Feb. 18, 3M said today in a statement. 3M’s new share-buyback plan has no set closing date, the St. Paul, Minnesota-based company said.
3M, which generated $4.1 billion of free cash flow last year, is steering cash to shareholders after spending at least $2 billion on acquisitions in 2010. The buyback amount matches the repurchase announced in February 2007, the highest in 3M’s history, Jacqueline Berry, a spokeswoman, said in an interview.
The new dividend payment falls short of the projected increase to 56 cents, based on data compiled by Bloomberg. Dividends will probably keep increasing between the rate of inflation and the rate of earnings growth, and the company will place “a little more emphasis on stock repurchases” this year, Chief Executive Officer George Buckley said Jan. 25.
3M had about 712 million shares outstanding as of Dec. 31, according to data compiled by Bloomberg. Based on today’s closing price, the buyback plan would cover about 78.2 million shares, or about 11 percent of those outstanding.
The shares rose as much as $1.38 to $90.85 in extended trading, after closing up 68 cents to $89.47 at 4 p.m. in the New York Stock Exchange composite trading.
To contact the reporter on this story: Will Daley in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Ed Dufner at email@example.com