3M lost its Dividend King status. Can it now save the core business?
After 64 years of uninterrupted growth, 3M lost its Dividend King title and cut its dividend in half. On top of that, a quarter of the business departed with the Solventum spin-off, and the company is weighed down by billions in legal liabilities from PFAS and Combat Arms lawsuits. For an investor, one thing matters most right now: is today's leaner 3M truly a better business, or just a smaller company with the same old problems?
Key points
Dividend: After 64 years of continuous growth, 3M cut it by 54% in 2024, from $1.51 to $0.70 per share quarterly. Since then, management has raised it twice, most recently to $0.78 for the third quarter of 2026.
Business: After spinning off the healthcare division Solventum, 3M is left with three segments. Safety and Industrial's operating margin jumped to 24.9%, while Transportation and Electronics fell to 17.4% due to PFAS exit costs.
Legal liabilities: The PFAS water utility settlement is set to cost $10.3 to $12.5 billion through 2036, and the Combat Arms earplugs settlement will cost $6 billion through 2029.
Cash flow: Adjusted free cash flow fell from $6.3 billion in 2023 to $4.4 billion in 2025, while unadjusted (GAAP) cash flow plunged to just $638 million in 2024.
Valuation: The stock trades around 26 times last year's GAAP earnings, but only about 19 times this year's adjusted outlook, a modest discount to peers like Illinois Tool Works or Emerson Electric.
Back in 2023, 3M was part of a small group of so-called Dividend Kings—companies that have increased their dividend without interruption for over half a century. A year later, it lost that status. At the same time, the company shed a quarter of its business by spinning off the healthcare division into a separate company, Solventum $SOLV, and bore the consequences of two massive legal settlements costing tens of billions of dollars. For an investor looking at 3M $MMM stock today, one specific question arises: are they buying a higher-quality, leaner industrial enterprise, or just a smaller company with a smaller dividend and the same structural problems as before?
What's left of 3M after Solventum
On April 1, 2024, 3M completed the spin-off of its healthcare division into a separate publicly traded company, Solventum. 3M shareholders received one share of Solventum for every four shares of 3M, and the company also retained a roughly 19.9% stake in the new company, which it gradually remeasures at market value and plans to sell within five years of the spin-off. This remeasurement of the stake is one reason why 3M's GAAP earnings have been volatile quarter-to-quarter since 2024: a drop in Solventum's share price in a single quarter can wipe out tens of cents of earnings per share without having anything to do with the operations of the remaining business.
After Solventum's departure, 3M manages its continuing operations in three segments:
Safety and Industrial
The largest segment, with revenue of $11.38 billion in 2025, or 45.6% of consolidated revenue. It includes abrasives, industrial adhesives and tapes, electrical markets, personal protective equipment, and roofing granules. Organic revenue grew 3.2 percentage points in 2025, and the segment's operating margin jumped from 22.7% to 24.9%. Management attributes this margin expansion to a combination of volume growth, productivity, and lower restructuring costs, partially offset by ongoing growth investments and costs related to the PFAS exit and the Solventum separation. After adjusting for one-time costs related to respirator and asbestos litigation, the segment margin was even higher at 25.4% versus 23.1% a year earlier. This is clearly the healthiest part of 3M today.
Transportation and Electronics
The second-largest segment, with revenue of $8.27 billion (33.2% of the total), includes advanced ceramic solutions, electronics and semiconductor materials, aerospace and automotive, and data center solutions. The segment's reported numbers for 2025 look weak: organic revenue fell 1.5 percentage points and operating margin declined from 18.8% to 17.4%. The explanation lies largely outside the business itself. The segment bore most of the costs associated with the completed exit from PFAS manufacturing at the end of 2025, including the remeasurement of residual production assets. After adjusting for this one-time impact, segment revenue was $7.6 billion, up 2.3% year over year, and adjusted margin was 22.7%, slightly lower than a year earlier due to a tough comparison with 2024, when the segment won a number of new contracts in the automotive and consumer electronics segments. So the underlying business grew, but the reported numbers did not.
Consumer
The smallest segment, with revenue of $4.92 billion (19.7% of the total): household cleaning products, air treatment products, office supplies, and brands like Scotch, Post-it, and Command. Organic revenue fell only slightly in 2025, by 0.3 percentage points, while the segment margin improved from 18.9% to 20.2%, the highest level in several years. The improvement is driven by productivity savings and lower restructuring costs, although demand for discretionary consumer categories remains weak.
The sum suggests that today's 3M has a simpler and fundamentally more profitable portfolio than the conglomerate before the Solventum spin-off. The Safety and Industrial segment is pulling margins up, the Consumer segment has stabilized, and the only visibly weak part, Transportation and Electronics, is weak primarily due to transitional PFAS exit costs, not a loss of competitiveness in the core business.