| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| Future Growth | 2/6 |
| Past Performance | 5/6 |
| Financial Health | 3/6 |
| Dividends | 5/6 |
GIS Stock Overview
General Mills, Inc. manufactures and markets branded consumer foods worldwide.
General Mills Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$77.50 |
| 52 Week High | US$78.24 |
| 52 Week Low | US$56.67 |
| Beta | 0.33 |
| 1 Month Change | 4.21% |
| 3 Month Change | 15.65% |
| 1 Year Change | 28.89% |
| 3 Year Change | 41.73% |
| 5 Year Change | 39.19% |
| Change since IPO | 749.32% |
Recent News & Updates
Is General Mills (NYSE:GIS) Using Too Much Debt?
Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...
Should You Be Adding General Mills (NYSE:GIS) To Your Watchlist Today?
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...
Is General Mills A Good Investment Following The Recent Dividend Hike?
General Mills has significantly outperformed the broader market over the past year, while also offering high and growing dividend. The dividend is also safer on both historical basis and when compared against General Mills' major peers. General Mills is now in a good position to further increase its dividend per share in the coming years, while not compromising safety. General Mills (GIS) is often seen as a company with little pricing power that is now in the crosshairs of rising inflationary pressures. In addition, the high dividend yields associated with large cap consumer staple companies are less of an incentive for shareholders in a world where the percentage change in CPI numbers are approaching double digits. In stark contrast with this simplistic view outlined above, however, GIS has defied all pessimistic expectations and achieved a total return of close to 25% at a time when the broader market declined by more than 5% (the starting point of the graph below is 26th of May 2021, when I first covered the company) Data by YCharts From a business point of view, GIS management has solidified the company's existing competitive advantages through some recent capital allocation decisions and have repositioned the business to more attractive product segments of the Packaged Food industry. I recently covered all that in a thought piece called 'General Mills: Capital Allocation Matters'. In the meantime, the management has also announced a recent dividend increase, which although is not enough to offset current inflation, is a positive sign for long-term investors. Seeking Alpha Consequently, the forward dividend yield of around 2.9% sets GIS among the highest yield large cap consumer staples in the packaged food space. prepared by the author, using data from Seeking Alpha Of the peers listed above, those with higher forward dividend yield are only: Kraft Heinz (KHC), Kellogg (K) and J. M. Smucker (SJM). However, each of these three companies had far worse returns since May of last year. Moreover, each of these three companies face significant obstacles from an overall strategy and business positioning (for more information on all that check here, here and here). Data by YCharts Additionally, GIS leading dividend yield is also accompanied by very strong ratings on safety, growth and consistency. Seeking Alpha In the following lines I will go deeper into these ratings and show why GIS' dividend is yet another key feature of the company that makes it an attractive long-term investment. General Mills' affordability and safety After reaching nearly 70%, GIS dividend payout ratio has declined to roughly 50% in recent years which is in-line with the long-term historical average. prepared by the author, using data from SEC Filings On a cross-sectional basis, the company's cash dividend payout and the forward payout ratio are both one of the lowest within the peer group. prepared by the author, using data from Seeking Alpha Although high quality consumer staple businesses could support much higher payout ratios for very long periods, GIS is well-positioned to continue its recent path towards more dividend increases. Equally important, the current dividend is also one of the safest within the peer group which is key feature for investors looking for shelter in lower risk parts of the equity market. In addition to the current snapshot of GIS dividend payout ratio, we also need to evaluate the company's profitability to assess the safety of the current dividend. Rising raw material costs is one of the major short-term risks for the dividend, given the company's lower gross margin relative to the peer group. Although GIS is not the most profitable business on a gross margin basis, its competitive positioning and iconic brands give the company significant pricing power, which so far is able to offset the rising costs of raw materials. For the company's next fiscal year, the management expects price realization and certain cost savings to once again offset expected inflation. So as we think about our approach to the next fiscal year, we're thinking about it much the same way. We're expecting only a modest decline in the level of supply chain disruption. We expect, as you mentioned, our price realization, and the combination of HMM to largely offset the dollar cost of the 14% inflation that we've called. And our expectation is that the remainder costs from disruption, we would work out over time to the extent that we see the environment stabilize. Source: GIS Q4 2022 Earnings Transcript All that is already reflected within the company's adjusted operating profit assumptions for the next fiscal year. General Mills Investor Presentation Given the net impact of divestitures and acquisitions, GIS is also in a good position to retain its operating profitability even as inflationary pressures increase. General Mills Investor Presentation Scope for future increases Even though GIS total number of shares outstanding has fluctuated in recent years, the current number of 613m is not materially different from the 612m shares outstanding as of the end of fiscal year 2016. prepared by the author, using data from SEC Filings During the same period, however, the company's dividend per share has stayed relatively flat. prepared by the author, using data from SEC Filings This was long-enough period for some investors to throw in the towel and conclude that GIS is unable to consistently raise dividends. However, it was during this period that the company made a meaningful move into the pet food business, which is now one of the crown jewels of the company. Moreover, the business was restructured through a number of smaller deals and divestitures in order to reinvigorate topline growth and better position the company. That is why future growth in dividend per share should not be judged based on recent history. From a cash flow perspective, GIS is also in a good position to continue to raise its dividends in the foreseeable future. On the graph below we see the annual dividend payments and capital expenditures as a percentage of the company's cash flow from operations.
Shareholder Returns
| GIS | US Food | US Market | |
|---|---|---|---|
| 7D | 0.7% | 1.8% | 1.4% |
| 1Y | 28.9% | 7.6% | -8.4% |
Return vs Industry: GIS exceeded the US Food industry which returned 7.4% over the past year.
Return vs Market: GIS exceeded the US Market which returned -9% over the past year.
Price Volatility
| GIS volatility | |
|---|---|
| GIS Average Weekly Movement | 2.8% |
| Food Industry Average Movement | 6.1% |
| Market Average Movement | 7.6% |
| 10% most volatile stocks in US Market | 17.1% |
| 10% least volatile stocks in US Market | 3.1% |
Stable Share Price: GIS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: GIS's weekly volatility (3%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1866 | 32,500 | Jeff Harmening | https://www.generalmills.com |
General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates in five segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; Asia & Latin America; and Pet. It offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and salty snacks, ice cream, nutrition bars, wellness beverages, and savory and grain snacks, as well as various organic products, including frozen and shelf-stable vegetables.
General Mills Fundamentals Summary
| GIS fundamental statistics | |
|---|---|
| Market Cap | US$46.17b |
| Earnings (TTM) | US$2.71b |
| Revenue (TTM) | US$18.99b |
17.1x
P/E Ratio2.4x
P/S RatioIs GIS overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| GIS income statement (TTM) | |
|---|---|
| Revenue | US$18.99b |
| Cost of Revenue | US$12.59b |
| Gross Profit | US$6.41b |
| Other Expenses | US$3.70b |
| Earnings | US$2.71b |
Last Reported Earnings
May 29, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 4.54 |
| Gross Margin | 33.73% |
| Net Profit Margin | 14.25% |
| Debt/Equity Ratio | 107.7% |
How did GIS perform over the long term?
See historical performance and comparisonDividends
2.6%
Current Dividend Yield46%
Payout RatioValuation
Is GIS undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
5/6Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for GIS?
Other financial metrics that can be useful for relative valuation.
| What is GIS's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$46.17b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 3x |
| Enterprise Value/EBITDA | 14.5x |
| PEG Ratio | 4.9x |
Price to Earnings Ratio vs Peers
How does GIS's PE Ratio compare to its peers?
| GIS PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 24x | ||
HSY Hershey | 29x | 4.2% | US$47.3b |
KHC Kraft Heinz | 30.9x | 10.7% | US$46.9b |
TSN Tyson Foods | 7.3x | -3.4% | US$29.4b |
HRL Hormel Foods | 29x | 8.1% | US$27.8b |
GIS General Mills | 17.1x | 3.5% | US$46.2b |
Price-To-Earnings vs Peers: GIS is good value based on its Price-To-Earnings Ratio (17.1x) compared to the peer average (24x).
Price to Earnings Ratio vs Industry
How does GIS's PE Ratio compare vs other companies in the US Food Industry?
Price-To-Earnings vs Industry: GIS is good value based on its Price-To-Earnings Ratio (17.1x) compared to the US Food industry average (19x)
Price to Earnings Ratio vs Fair Ratio
What is GIS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 17.1x |
| Fair PE Ratio | 24.3x |
Price-To-Earnings vs Fair Ratio: GIS is good value based on its Price-To-Earnings Ratio (17.1x) compared to the estimated Fair Price-To-Earnings Ratio (24.3x).
Share Price vs Fair Value
What is the Fair Price of GIS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: GIS ($77.5) is trading below our estimate of fair value ($149.66)
Significantly Below Fair Value: GIS is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is lower than the current share price.
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Future Growth
How is General Mills forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?
Future Growth Score
2/6Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
3.5%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: GIS's forecast earnings growth (3.5% per year) is above the savings rate (1.9%).
Earnings vs Market: GIS's earnings (3.5% per year) are forecast to grow slower than the US market (14.4% per year).
High Growth Earnings: GIS's earnings are forecast to grow, but not significantly.
Revenue vs Market: GIS's revenue (1.9% per year) is forecast to grow slower than the US market (7.8% per year).
High Growth Revenue: GIS's revenue (1.9% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: GIS's Return on Equity is forecast to be high in 3 years time (22.3%)
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Past Performance
How has General Mills performed over the past 5 years?
Past Performance Score
5/6Past Performance Score 5/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
7.6%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: GIS has high quality earnings.
Growing Profit Margin: GIS's current net profit margins (14.3%) are higher than last year (12.9%).
Past Earnings Growth Analysis
Earnings Trend: GIS's earnings have grown by 7.6% per year over the past 5 years.
Accelerating Growth: GIS's earnings growth over the past year (15.6%) exceeds its 5-year average (7.6% per year).
Earnings vs Industry: GIS earnings growth over the past year (15.6%) exceeded the Food industry 5.4%.
Return on Equity
High ROE: Whilst GIS's Return on Equity (25.35%) is high, this metric is skewed due to their high level of debt.
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Financial Health
How is General Mills's financial position?
Financial Health Score
3/6Financial Health Score 3/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: GIS's short term assets ($5.1B) do not cover its short term liabilities ($8.0B).
Long Term Liabilities: GIS's short term assets ($5.1B) do not cover its long term liabilities ($12.3B).
Debt to Equity History and Analysis
Debt Level: GIS's net debt to equity ratio (100.1%) is considered high.
Reducing Debt: GIS's debt to equity ratio has reduced from 169.9% to 107.7% over the past 5 years.
Debt Coverage: GIS's debt is well covered by operating cash flow (28.5%).
Interest Coverage: GIS's interest payments on its debt are well covered by EBIT (8.9x coverage).
Balance Sheet
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Dividend
What is General Mills's current dividend yield, its reliability and sustainability?
Dividend Score
5/6Dividend Score 5/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
2.63%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: GIS's dividend (2.63%) is higher than the bottom 25% of dividend payers in the US market (1.48%).
High Dividend: GIS's dividend (2.63%) is low compared to the top 25% of dividend payers in the US market (3.99%).
Stability and Growth of Payments
Stable Dividend: GIS's dividends per share have been stable in the past 10 years.
Growing Dividend: GIS's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (45.8%), GIS's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonably low cash payout ratio (44.2%), GIS's dividend payments are well covered by cash flows.
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Management
How experienced are the management team and are they aligned to shareholders interests?
5.1yrs
Average management tenure
CEO
Jeff Harmening (55 yo)
5.17yrs
Tenure
US$12,266,195
Compensation
Mr. Jeffrey L. Harmening, also known as Jeff, has been the Chief Executive Officer at General Mills, Inc. since June 1, 2017. Mr. Harmening served as the President of General Mills, Inc. since July 1, 2016...
CEO Compensation Analysis
Compensation vs Market: Jeff's total compensation ($USD12.27M) is about average for companies of similar size in the US market ($USD12.88M).
Compensation vs Earnings: Jeff's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: GIS's management team is seasoned and experienced (5.1 years average tenure).
Board Members
Experienced Board: GIS's board of directors are considered experienced (5.7 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: GIS insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
General Mills, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: General Mills, Inc.
- Ticker: GIS
- Exchange: NYSE
- Founded: 1866
- Industry: Packaged Foods and Meats
- Sector: Food, Beverage & Tobacco
- Implied Market Cap: US$46.168b
- Shares outstanding: 595.71m
- Website: https://www.generalmills.com
Number of Employees
Location
- General Mills, Inc.
- Number One General Mills Boulevard
- Minneapolis
- Minnesota
- 55426
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/18 00:00 |
| End of Day Share Price | 2022/08/18 00:00 |
| Earnings | 2022/05/29 |
| Annual Earnings | 2022/05/29 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.