A slowing global economy and the effects of a stronger dollar couldn’t keep four of InvestorPlace’s most Dependable Dividend Stocks down in the second quarter, as 3M (NYSE:MMM), Colgate-Palmolive (NYSE:CL), Kimberly-Clark (NYSE:KMB) and McGraw-Hill (NYSE:MHP) all managed to meet or beat Wall Street estimates.
It was a tough three months, to be sure, with revenue gains hard to come by, as weaker demand from overseas and currency exchange tamped down revenue. But shares in all four companies rose smartly Thursday, helped by the solid bottom-line results and positive earnings outlooks.
That’s good news for income investors. Not only do all these names have long histories of rising payouts, but now they’re getting some solid share-price appreciation, too.
3M, the Dow component best known to consumers for Scotch Tape and Post-it notes, said second-quarter earnings rose only fractionally to $1.17 billion, or $1.66 per share, but that still exceeded analysts’ average estimates by a penny.
Sales slipped almost 2% to $7.53 billion, hurt in part by converting weaker euros into stronger dollars. Additionally, a slump in 3M’s consumer electronics division, which makes things like films for flat-panel TVs, offset better results in industrial products and medical supplies.
But most important, 3M maintained its full-year outlook for earnings of $6.35 to $6.50 a share.
The stock rallied nearly 4% after the opening bell, outpacing the Dow’s own impressive gains, and yet still offered a dividend yield of 2.6%. (Yields and prices move in opposite directions.)
Not to be outdone, shares in Colgate-Palmolive rose sharply Thursday after the maker of toothpaste and dish soap said price hikes and cost cuts allowed earnings to match Street forecasts.
Like 3M, the stronger dollar and weaker demand hurt revenue, but Colgate navigated the challenges well enough. Net income rose less than 1% to $627 million. On an adjusted basis, earnings of $1.33 a share matched Street estimates.
Revenue, though depressed by global weakness, still grew almost 2% to $4.27 billion, coming in ahead of analysts’ outlook.
Meanwhile, all-important gross margin expanded to 57.7% from 57.4%. That might not sound like much, but it comes to 300 basis points, which essentially is a bonanza — and of particular importance to any company trying to manage in a world where costs for everything from oil to packaging to energy are rising.
Best of all, even after leaping Thursday, Colgate’s stock still offered a dividend yield of 2.35%.