Consistent dividends are among the best ways for investors to generate consistent income and create wealth long-term. But not all dividends are created equal.

Long-term, investors should be looking for a dividend that's not only sustainable but also grows over years, even decades. Companies that can do that are what we call Dividend Aristocrats, and 3M (NYSE:MMM) is one of the best on the market.

Nearly a century-long dividend

Not only has 3M paid a dividend for 98 straight years, it has also increased its dividend for 56 consecutive years, through almost every imaginable economic scenario.

It does this through the nature of its business and the way management views its responsibility to shareholders. A diverse business helps maintain the consistent cash flows 3M needs to pay investors year after year, and management has proven that dividends are a priority, even in the roughest economic times. 

What powers this Dividend Aristocrat

What separates 3M from other companies is the diversity of its businesses. It has exposure to consumer goods, electronics and energy, healthcare, industrial, and safety and graphics markets, and sells into more than 70 countries worldwide. This allows 3M to generate consistent cash flow through good times and bad, leading to the dividend consistency I pointed out above.  

3M's growth goals. Image source: 3M.

Impressively, 3M is also able to reinvent itself consistently by inventing new products to enter new markets. This is driven by technology cultivated in 3M's labs, and is often kept -in-house with its global manufacturing capabilities. 

Source: 3M. 

Innovation drives 3M's organic growth, and that's why its new management team has committed to increasing R&D spending from 5.5% of revenue in 2012 to around 6% in 2017. The goal is to keep organic growth between 4% and 6% between now and then. 

A focus on shareholder returns

It's not only dividends that 3M uses to return cash to shareholders. It also buys back shares, recently approving a $12 billion share repurchase program.

In the last 10 years, 97% of 3M's reported net income has either been paid out in dividends or spent on buybacks, showing the priority the company places on returning cash to shareholders. It's that focus and 3M's consistency that makes this stock likely to remain a Dividend Aristocrat for decades to come.

Is now the time to buy?

I've laid out the landscape of 3M above, but is this a Dividend Aristocrat you should buy? 

MMM Dividend Chart

MMM Dividend data by YCharts.

The P/E ratio of 20 is slightly higher than the Dow Jones Industrial Average's ratio of 16, but as you can see, the dividend is a big selling factor in its consistent growth. Also, consider that the payout ratio, or amount of net income paid out in dividends, is just 41%, allowing for dividend growth if management so chooses. 

At the end of the day, 3M should be a foundation of any dividend portfolio, and the consistent growth in payouts and consistent profits make the stock a great buy.