Assessing the Sustainability of General Mills Inc's Dividend
General Mills Inc (GIS, Financial) recently announced a dividend of $0.59 per share, payable on 2024-05-01, with the ex-dividend date set for 2024-04-09. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into General Mills Inc's dividend performance and assess its sustainability.
What Does General Mills Inc Do?
General Mills is a global packaged food company that produces snacks, cereal, convenient meals, yogurt, dough, baking mixes and ingredients, pet food, and superpremium ice cream. Its largest brands are Nature Valley, Cheerios, Old El Paso, Yoplait, Pillsbury, Betty Crocker, Blue Buffalo, and Haagen-Dazs. In fiscal 2023, 81% of its revenue was derived from the United States, although the company also operates in Canada, Europe, Australia, Asia, and Latin America. While most of General Mills' products are sold through retail stores to consumers, the company also sells products to the foodservice channel and the commercial baking industry.
A Glimpse at General Mills Inc's Dividend History
General Mills Inc has maintained a consistent dividend payment record since 1986, distributing dividends on a quarterly basis. Recognized as a dividend aristocrat for increasing its dividend annually for at least the past 38 years, General Mills Inc demonstrates a strong commitment to shareholder returns. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down General Mills Inc's Dividend Yield and Growth
As of today, General Mills Inc currently has a 12-month trailing dividend yield of 3.31% and a 12-month forward dividend yield of 3.38%, indicating an expected increase in dividend payments over the next 12 months. Over the past three years, General Mills Inc's annual dividend growth rate was 3.30%, which decreased to 1.80% over a five-year period. However, looking at the past decade, the annual dividends per share growth rate stands at 4.00%. Reflecting on these figures, the 5-year yield on cost for General Mills Inc stock is approximately 3.62%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. General Mills Inc's dividend payout ratio is 0.50 as of 2024-02-29, suggesting a balance between distributing earnings and retaining funds for future growth and downturns. The company's profitability rank, which stands at 8 out of 10, indicates good profitability prospects and is supported by a consistent record of positive net income over the past decade.
Growth Metrics: The Future Outlook
General Mills Inc's growth rank of 8 out of 10 suggests a positive growth trajectory when compared to competitors. The company's revenue per share and 3-year revenue growth rate of 5.20% may underperform approximately 56.48% of global competitors, yet it indicates a solid revenue model. The 3-year EPS growth rate of 3.00% and the 5-year EBITDA growth rate of 6.50% also provide insight into the company's ability to sustain dividends, despite underperforming against some global competitors.
Concluding Insights on General Mills Inc's Dividend Health
General Mills Inc's consistent dividend payments, growth rates, and a prudent payout ratio underscore the company's commitment to shareholder returns. Coupled with its strong profitability and growth metrics, these factors paint a picture of a robust dividend profile. Investors considering dividend stocks should weigh these attributes when making investment decisions. For further analysis, GuruFocus Premium users can leverage the High Dividend Yield Screener to identify other high-dividend yield stocks.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
