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sagitarius84 (54.80)

Should I invest in General Mills?



October 17, 2017 – Comments (0) | RELATED TICKERS: GIS , CPB , K

General Mills, Inc. is a manufacturer and marketer of branded consumer foods sold through retail stores. The Company is a supplier of branded and unbranded food products to the North American foodservice and commercial baking industries. The Company has three segments: U.S. Retail, International, and Convenience Stores and Foodservice.

Today we are going to evaluate General Mills (GIS) against these simple four filters. In general:

1. I look for quality companies (evidenced by a long streak annual dividend increases)
2. I want them at an attractive valuation
3. I want EPS growth, to ensure future dividend growth and growth in intrinsic value over time
4. I want an adequate margin of safety in dividends

General Mills is a dividend achiever which has increased dividends to shareholders for 14 years in a row. The company and its predecessors have paid dividends without interruption for 119 years. Over the past decade, General Mills has managed to hike annual dividends at a rate of 10.40%/year. 


The stock is down in recent months, along with peers such as Kellogg's (K) and Campbell Soup (CPB). The stock appears to be attractively valued at 16.70 times forward earnings and a dividend yield of 3.80%. This review is in sharp contrast to the review we did last year, when the stock was overvalued at 23 times expected earnings.

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