Key Takeaways
- General Mills yields 7.7%, about twice J.M. Smucker’s 3.9%, but management expects to hold its dividend at the current rate while it pays down debt.
- General Mills paid out 85% of its free cash flow as dividends over the twelve months to Aug. 30, 2026, against 29% at Smucker over the twelve months to July 31, 2026.
- Analysts expect those ratios to come in at 76% and 40% for fiscal 2027.
- Smucker has already brought its leverage back to its 3x net debt to EBITDA target, while General Mills expects that to take at least a couple of years.
General Mills (GIS) yields 7.7%, and its CFO says the dividend behind that yield won’t rise in the near term.
J.M. Smucker (SJM), by contrast, announced in July that it had raised its dividend for the 25th consecutive fiscal year, and it yields 3.9%.
So which is the better dividend stock: the bigger check, or the one still growing?
| Metric | General Mills (GIS) | J.M. Smucker (SJM) |
|---|---|---|
| Dividend yield | 7.7% | 3.9% |
| Dividend growth, fiscal 2021–2026 | 3.9% a year | 4.1% a year |
| Cash dividend payout ratio (TTM) | 85% | 29% |
| Cash dividend payout ratio (fiscal 2027 consensus) | 76% | 40% |
| Net debt/EBITDA (LTM) | 3.67x | 2.91x |
General Mills: a big check on hold
General Mills’s sales still aren’t growing. In the first quarter of fiscal 2027, to Aug. 30, 2026, organic net sales were flat against the same quarter a year before. Foodservice and International each grew 4% organically, while North America Retail fell 3%.
Free cash flow has covered the dividend in every fiscal year since 2017. In fiscal 2026, to May, the dividend took 81% of it, up from 58% in fiscal 2025.
Over the twelve months to Aug. 30, 2026, it took a tight 85%. Analysts expect a still-tight 76% for fiscal 2027, on $1.75 billion of free cash flow.
As CFO Kofi Bruce put it, “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.” With 85% of free cash flow already going out, that’s the sensible call.
The main risk is profit. Management expects fiscal 2027 adjusted operating profit to fall 8% to 13% in constant currency.
Smucker: room to spare
Smucker’s dividend has far more room than General Mills’s.
Its net sales for the first quarter of fiscal 2027, to July 31, 2026, were $2.2 billion, up 5% on the same quarter a year before. Uncrustables grew volume by double digits and Café Bustelo’s net sales rose 23%. Sweet Baked Snacks fell 7%.
Free cash flow has covered Smucker’s dividend in every fiscal year since 2017 too. In fiscal 2026, to April, the dividend took 40% of it, down from 68% in fiscal 2024.
Over the twelve months to July 31, 2026, it took a comfortable 29%. That figure is flattered by $337.3 million of free cash flow in the latest quarter, against negative $94.9 million in the same quarter a year before. Analysts expect a well-covered 40% for fiscal 2027, on $1.18 billion of free cash flow, close to management’s guide of about $1.1 billion.
Smucker also got its leverage back to its 3x net debt to EBITDA target ahead of schedule. CFO Tucker Marshall said: “we remain committed to the quarterly dividend, which we recently announced an increase. And we now have the flexibility to begin contemplating share repurchases as we move forward.”
The main risk: management expects fiscal 2027 net sales to fall 1% to 2%.
So which dividend wins?
General Mills is the better dividend stock. It pays so much more income that Smucker’s faster raises can’t catch up.
Take the pace each dividend rose in fiscal 2026: 1.7% at General Mills and 1.9% at Smucker. At those rates, $10,000 invested today would pay about $894 from General Mills in year 10, against about $460 from Smucker. At their 5-year rates, it’s about $1,082 against $560. Call it a 10.8% yield on your cash today, against 5.6%. Either way, Smucker’s income wouldn’t pass General Mills’s for more than 30 years.
Even with no raise at all, General Mills’s $770 a year would beat Smucker’s year-10 income. And no raise is close to the plan for now. General Mills’s leverage rose from 2.7x net debt to EBITDA 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.”
Smucker’s case is strong. Its dividend takes a far smaller share of free cash flow, it has been raised for 25 consecutive fiscal years, and its leverage is back at target. It’s just that, when it comes down to it, General Mills’s dividend is still covered and management is fully committed to it. It also pays $770 a year on $10,000, against Smucker’s $390.
Of course, that holds only if General Mills’s free cash flow comes in near the $1.75 billion analysts expect for fiscal 2027. At 85%, there isn’t much room left.
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!
