3M and PG - Smart Long-Term Buys in Turbulent Markets

3M (NYSE:MMM) and P&G (Proctor & Gamble) (NYSE: PG) are two of the Top 20 Innovators of The Innovation Index.

Both 3M and P&G are resilient innovators who time and again find ways to grow and excel in turbulent times, and reward their investors. 3M is an innovation machine. P&G knows how to grow through innovations.

For instance, "the Board of Directors of 3M (NYSE:MMM) declared a dividend (this month) on the company's common stock of 50 cents per share for the first quarter 2008, a 4.2 percent increase over the quarterly dividend paid in 2007." This would mark the company's 366th consecutive quarterly dividend and the 50th consecutive year of 3M dividend increases. Also, 3M has returned $16.6 billion to shareholders through dividends and share repurchases, $4.6 billion of which was in 2007.

How is 3M stock performing over the last two years? It has gained 12%, and has been at times choppy. However, if one accounts for the dividends that 3M has rewarded, it has performed reasonably well.

3M Stock Performance

We believe 3M will rebound for the rest of 2008, and 3M stock will finish in the range of at least 5% to 10% appreciation. Main reasoning has to do with the latest earnings report where it reported 2007 sales of $24.5 billion, an all-time record for the company. Sales were up 7 percent from a year ago, and up 11 percent adjusted for recently divested businesses. Net income for 2007 was $4.1 billion, or $5.60 per share, versus $3.9 billion or $5.06 per share in 2006, up 6 percent and 11 percent, respectively. And the company emphasized its 2008 guidance: "3M reiterated its 2008 earnings expectations. The company expects 2008 earnings to be a minimum 10 percent increase over its 2007 earnings-per-share of $4.98, which excludes special items."

P&G stock has performed rather well gaining 28% over the last two years. We believe P&G will have another double-digit performance in 2008 owing to its strong growth and earnings momentum, and new innovations across various industries.

P&G Stock Performance

The Procter & Gamble Company (NYSE: PG) announced "net sales growth of nine percent to $21.6 billion for the latest quarter. Sales were up behind strong volume growth from continued success on key product initiatives and double-digit organic growth in developing regions. Organic volume increased six percent and organic sales were up five percent for the quarter. Diluted earnings per share increased 17 percent to $0.98 per share, above the top end of the company's $0.95 to $0.97 per share guidance range. Earnings grew as topline growth and continued Gillette synergy benefits more than offset higher commodity costs." P&G also announced new coffee business under the Folgers coffee brand to be called The Folgers Coffee Company. P&G continues to grow under the creative leadership of A.G. Lafley, Chairman of the Board and Chief Executive Officer. Lafley is a creative leader who knows how to drive new innovations.

3M and P&G - they are both smart, long-term buys in turbulent markets!

Invest in the Innovation Index Fund

We launched the new Innovation Index Fund in December, 2007 that invests in the Innovation Index and returned 66% in 2007, and 174% in the previous five years. If you want to learn more about the Innovation Index Fund, fill out your contact information at the bottom of this form: http://www.innovationindexgroup.com/invest.html

The Innovation Index Reports:

Invest in The Innovation Index - Invest in the brand new Innovation Index Fund
Introducing The Innovation Index Fund - Invest into The Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Companies
Annual Report - Chapter One - Total Innovation Activity - 2006 Annual Report One
Annual Report - Chapter Two - The Top Innovator - 2006 Annual Report Two
Annual Report - Chapter Three - The Innovation Insights - 2006 Annual Report Insights
Innovation and Stock Performance Correlation - The Innovation Index and Stock Performance
The Innovation Index gallops to 56% - Quarterly Report - Q3, 2007

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index returned 66% in 2007, and returned 174% over the previous five years (2002-2006). This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.