Key Takeaways
- Campbell’s cut its quarterly dividend 36% to $0.25 a share on Sept. 3, 2026, to put about $170 million a year toward debt.
- General Mills yields 7.7% as of Oct. 7, 2026, and says it will keep its dividend at the current rate while it pays down debt.
- General Mills paid out 85% of its free cash flow over the twelve months to Aug. 30, 2026, against 69% for Campbell’s over the twelve months to Aug. 2, 2026.
- Watch General Mills’ leverage: net debt is 3.7x EBITDA against a 3x target that management says will take at least a couple of years to reach.
The Campbell’s Company (CPB) cut its quarterly dividend 36% on Sept. 3, 2026, from $0.39 a share to $0.25, to pay down debt faster.
Three weeks later, General Mills (GIS) faced the same pressure and went the other way. On Sept. 23, it told investors it would hold its dividend at the current rate while it works its debt down.
Retirees seeking income want a check they can count on. As of Oct. 7, 2026, General Mills yields 7.7% and Campbell’s yields 5.4%. So which is the better dividend stock for retirees?
| Metric | General Mills (GIS) | Campbell’s (CPB) |
|---|---|---|
| Dividend yield (Oct. 7, 2026) | 7.7% | 5.4% |
| Annual dividend | $2.44 | $1.00 |
| 5-year dividend growth | 3.9% a year (fiscal 2021–2026) | 1.9% a year (fiscal 2020–2025, before the cut) |
| Cash dividend payout ratio, TTM | 85% (to Aug. 30, 2026) | 69% (to Aug. 2, 2026) |
| Cash dividend payout ratio, forward (fiscal 2027 consensus) | 76% | 40% |
| Net debt / EBITDA (LTM) | 3.67x | 3.44x |
| Interest coverage, EBIT / interest (LTM) | 4.94x | 3.65x |
General Mills is holding the line
In the first quarter of fiscal 2027, which ended Aug. 30, 2026, General Mills’ organic net sales were flat against the year before. For the full fiscal year, management expects organic net sales between down 1.5% and up 0.5%.
Free cash flow fell from $2.29 billion in fiscal 2025 to $1.63 billion in fiscal 2026, while dividends paid came to $1.32 billion in fiscal 2026. That pushed the cash dividend payout ratio from a comfortable 58% to 81%.
Over the twelve months to Aug. 30, 2026, the ratio was a tight 85%. Analysts expect it to ease to 76% in fiscal 2027 as free cash flow rises to $1.75 billion. CFO Kofi Bruce said: “we remain fully committed to our dividend, and in the near term, we expect to maintain the current rate per share while we prioritize deleverage.”
At 85%, though, the dividend has little room if fiscal 2027’s cash comes in short.
Campbell’s already made the hard call
Campbell’s faced the same balance-sheet pressure with a weaker business behind it. In fiscal 2026, which ended Aug. 2, 2026, net sales fell 5% to $9.7 billion and adjusted EBIT fell 21% to $1.2 billion. As CEO Mick Beekhuizen put it: “Our performance is not where it needs to be, and we are taking decisive action to improve it.”
Free cash flow slid from $1.1 billion in fiscal 2020 to $678 million in fiscal 2026. Over the same years, dividends paid rose from $426 million to $470 million…
That left a 69% cash dividend payout ratio for the twelve months to Aug. 2, 2026. Analysts expect a well-covered 40% in fiscal 2027, as the smaller dividend kicks in and free cash flow rises 13% to $767 million. Campbell’s expects the cut to free up about $170 million a year for debt reduction.
The turn isn’t done: for fiscal 2027, management guides for organic net sales down 2% to 4% and adjusted EPS of $1.65 to $1.80, down 17% to 24%.
So which dividend wins?
General Mills is the better dividend stock for retirees. It pays the bigger check, and management kept that check intact through the same squeeze that led Campbell’s to cut.
At the Oct. 7 yields, $10,000 in General Mills pays $770 a year and $10,000 in Campbell’s pays $540. Even if Campbell’s went back to raising its dividend at its pre-cut 5-year rate of 1.9% a year, that $10,000 would pay about $641 in year 10. That’s still short of what General Mills pays today.
Campbell’s does have the wider cushion: 69% of free cash flow over the last twelve months against 85% for General Mills, and 40% forward against 76%. But that cushion came from cutting the check, and anyone who held through Sept. 3 now collects 36% less. General Mills also covers its interest 4.94x against 3.65x for Campbell’s, and expects a smaller sales decline in fiscal 2027. For a retiree, a bigger check from a company that held it beats a smaller one from a company still working through its turnaround.
The catch is General Mills’ debt. Its net debt to EBITDA has climbed well above its 3x target.
Leverage rose from 2.7x in fiscal 2022 to 3.7x in fiscal 2026. Bruce expects it to take “at least a couple of years to work ourselves back to our target of 3x net debt to EBITDA,” so don’t count on a raise before then.
So what is General Mills stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
