3M Co. (NYSE: MMM) has enjoyed a wonderful 2013, as has General Electric Co. (NYSE: GE). GE’s stock is up almost 29% so far in 2013 versus a gain of 38% for 3M. We are waiting for a dividend hike from GE in the next two weeks, but after taking a look at the conglomerate universe it seems as though 3M should consider prematurely taking the thunder of a dividend hike. The reality is that this is setting up a show down for 2014 for both conglomerates.

Investors have some considerations to make soon. First is that 3M was recently removed from the prized High Quality & Dividend Yield Screen conducted by Merrill Lynch. The reason: 3M yields less than the average of the S&P 500 common dividend on average now. A recent Morgan Stanley downgrade down to Underweight whacked 3M over the Thanksgiving week, sending shares from about $134 down to about $125 on Tuesday.

Still, 3M yields about 2% for new investors who want to buy the stock. GE has a 2.8% yield now that its shares have risen this year. The $2.54 annualized payout as of now from 3M is only about 38% of expected 2013 operating earnings and about 34% of expected 2014 operating earnings. GE’s $0.76 current dividend on an annualized basis represents close to 46% of expected 2013 earnings and about 43% of expected 2014 operating earnings.

The 3M board of directors approved an 8% dividend increase this last February over the dividend paid in 2012. The current rate of $0.635 per share per quarter is what gets the yield only to 2% and it was worse before the Morgan Stanley downgrade took the steam away from 3M.

Will 3M likely do this maneuver? Almost certainly not. What 24/7 Wall St. wants its readers to understand is that GE has a dividend hike almost certainly being announced within the next two weeks. 3M’s dividend hike is likely to be in two months. There are several other considerations to make here:

• GE trades at about 16.2-times expected 2013 earnings versus about 18.6-times for 3M.
• GE is soon to be spinning off the majority of its consumer finance operations so it can be valued as an industrial conglomerate.
• GE has more than 8% implied upside to its consensus analyst price target over the next 12-month period versus 1.4% implied upside for 3M, and 3M was above that price target before the Morgan Stanley downgrade.
• GE is worth $267 billion in market cap versus just over $84 billion for 3M.

Stay tuned. These dividend hikes are coming, even if patience is a virtue that is hard to find these days.

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