General Mills Inc (GIS)
Current Share Price:
Valuation Verdict:
Analysis Date:
33.13
Undervalued
23/11/2025
Current Dividend Yield:
Dividend Safety Verdict:
Analyst:
7.36
Safe
European DGI
Current Share Price:
33.13
Valuation Verdict:
Undervalued
Analysis Date:
23/11/2025
Current Dividend Yield:
7.36
Dividend Safety Verdict:
Safe
Analyst:
European DGI
Key Data at the Time of Analysis:
Share Price
$48.33
Dividend / Share
$2.44
Dividend Yield
5.05%
Dividend Growth (Yrs)
96
5 Yr Dividend CAGR
3.65
Safety Score
68
Company Profile
General Mills, Inc. ($GIS) is a leading American multinational manufacturer and marketer of branded consumer foods, headquartered in Minneapolis, Minnesota. The company offers a diverse portfolio of iconic brands like Cheerios, Nature Valley, Pillsbury, and Blue Buffalo. It operates globally across key segments such as North America Retail, International, Pet Segment, and Foodservice. General Mills focuses on making food the world loves.
Country:
United States
Sector:
Consumer Defensive
Industry:
Packaged Foods
Market Cap Type:
Large-cap (≥ $10 billion)
Payout Frequency:
Quarterly
Ticker Symbol
GIS
Dividend Policy
Cash return to shareholders of 80 to 90 percent of free cash flow, including an attractive dividend yield.
Source:
Annual Report 2024: https://s29.q4cdn.com/993087495/files/doc_financials/2025/ar/GIS009_10K_2025_Bookmarked.pdf
Dividend Currency:
USD
Financial Overview
5 Yr Revenue Growth
1.3%
5 Yr EPS Growth
7.1%
Credit Rating
Baa2
FCF Payout %
63.14%
EPS FWD Payout %
46.12%
ROCE
15.96%
Recent Quarter Highlight
Adjusted EPS of $0.86, although down 20% constant currency, still covers the $0.61 dividend. While by far the largest segment “North America Retail” was weak (down 13%), the “North America Pet” segment grew by 6%.
Investment Thesis
The company’s Accelerate strategy outlines a path for fundamental growth, using digital tools to improve supply chain efficiency and drive e-commerce sales. General Mills also has a strong position in the high-growth pet food market through its Blue Buffalo brand, a key growth driver. Management’s focus on margin expansion and solid free cash flow conversion should support the dividend sustainability and potential growth.
Risks / Bear Case
Potential intense price competition in the consumer staples sector to check how deep the pockets are, particularly if volume declines accelerate as consumers switch to cheaper private label alternatives. Persistent high input costs and supply chain disruptions could continue to pressure gross margins. Finally, changing consumer preferences, especially the trend toward fresh and healthier food, poses a structural headwind for the traditional packaged-food categories that make up a large portion of the business.
Valuation
A slow growing company like General Mills, which has grown it’s dividend for 96 years is probably best evaluated using the Dividend Discount Model. Taking the current dividend of $2.44 as a baseline, a 5% compounded annual growth rate at a 11% desired return would value the company at $40.67.
Price / Earnings
9.14
Forward P/Earnings
13.25
Price / FCF/share
12.51
Discounted Cash Flow
$42.02
Dividend Discount Model
$40.67
Chowder Rule
8.70%
Dividend Yield History
By comparing today’s dividend yield to its five-year range (5th–95th percentile), you can see whether the stock looks attractive from a yield perspective, while keeping in mind that an unusually high yield may also signal a potential value trap if the business is under pressure.
Disclaimer: Companies that have had a stock split in the past year (e.g., Apple) may show misleading dividend yield data. We are working to correct this.
Conclusion
We rate the dividend as safe, due to its 96 year track record, manageable payout ratios and strong brand portfolio. We do wish that the company would improve their balance sheet a bit with the aim to get a better credit rating and reduce the cost of debt.
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