Key Takeaways
- General Mills yields 7.7% and Altria 6.2%, and General Mills expects to hold its dividend at the current rate in the near term while it pays down debt.
- Altria’s dividend used 78% of its free cash flow over the twelve months to June 30, 2026, against 85% at General Mills over the twelve months to Aug. 30, 2026.
- General Mills’s net debt was 3.7x EBITDA in fiscal 2026, above its own 3x target, against 1.4x at Altria.
- General Mills expects fiscal 2027 adjusted earnings per share of $3.00 to $3.20, with adjusted operating profit down 8% to 13% in constant currency.
General Mills (GIS) yields 7.7% after its stock fell almost 22% in September, but don’t count on that check getting bigger anytime soon. On Sept. 23, 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.”
That freeze makes the matchup with Altria Group (MO) a lot more interesting. Altria yields less, at 6.2%, but on Aug. 27, it raised its quarterly dividend 4.7% to $1.11 a share, its 61st increase in 57 years.
So which is the better high-yield dividend stock? Here’s how they stack up:
| Metric | Altria Group (MO) | General Mills (GIS) |
|---|---|---|
| Dividend yield | 6.2% | 7.7% |
| Annual dividend | $4.44 | $2.44 |
| 5-year dividend growth | 4.1% a year (fiscal 2020 to 2025) | 3.9% a year (fiscal 2021 to 2026) |
| Cash dividend payout ratio (TTM) | 78% (to June 30, 2026) | 85% (to Aug. 30, 2026) |
| Net debt/EBITDA (LTM) | 1.4x | 3.7x |
| Interest coverage (LTM) | 13.3x | 4.9x |
Altria’s cash keeps covering the check
Altria’s core volumes are shrinking. Domestic cigarette and moist smokeless tobacco shipments are declining, which the company puts down to industry declines, squeezed discretionary income and smokers moving to e-vapor. Nicotine pouches are the bright spot, with on! PLUS growing on its national expansion.
Earnings are still growing all the same. Adjusted diluted EPS rose 4.9% to $2.80 in the first half of 2026, and Altria expects $5.61 to $5.72 for the full year, 3.5% to 5.5% above 2025’s $5.42.
The cash behind the dividend has held up too. Free cash flow has topped dividends paid every year since fiscal 2018, reaching $9.07 billion in fiscal 2025 against $6.96 billion paid out.
Its cash dividend payout ratio has stayed between 75% and 82% every fiscal year since 2021, and was 78% over the twelve months to June 30, 2026. That’s solid coverage for a business whose volumes are falling.
The risk is the top line. Net revenues were $6.11 billion in the second quarter of 2026, up just 0.1% from a year earlier.
General Mills is paying down debt first
General Mills pays the bigger check, and it rests on thinner cash coverage than Altria’s. Free cash flow fell from $2.29 billion in fiscal 2025 to $1.63 billion in fiscal 2026 (the year to May), while the dividend still took $1.32 billion.
That pushed its cash dividend payout ratio from 51% in fiscal 2021 to 81% in fiscal 2026, and to 85% over the twelve months to Aug. 30, 2026. That’s a tight squeeze.
The business is mixed. In the quarter to Aug. 30, 2026, organic net sales were flat: North America Foodservice and International each grew 4% organically, while North America Retail fell 3% organically, with cereal and U.S. snacks still weak.
The risk is earnings. Management expects fiscal 2027 adjusted operating profit to fall 8% to 13% in constant currency, with adjusted EPS of $3.00 to $3.20.
So which dividend wins?
Altria is the better high-yield dividend stock. Its yield is lower, but its dividend is better covered, still growing, and backed by a far stronger balance sheet.
General Mills’s net debt has climbed from 2.7x EBITDA in fiscal 2022 to 3.7x in fiscal 2026, above its own 3x target.
On the company’s own count it’s a little over 4x, Bruce confirmed, and he expects it to take “at least a couple of years to work ourselves back to our target of 3x net debt to EBITDA.” In the meantime, management expects to hold the dividend at its current rate. Altria sits at 1.4x, with interest coverage of 13.3x against 4.9x at General Mills.
That freeze also eats into General Mills’s income lead. On $10,000, it pays $770 a year to Altria’s $620. But at each dividend’s latest pace (Altria’s 4.0% raise in fiscal 2025, General Mills’s 1.7% in fiscal 2026), Altria’s income would pass General Mills’s in about 9.5 years, around 2036. And that assumes General Mills keeps raising, which management says it won’t in the near term.
This isn’t to say General Mills’s dividend is unsafe. Free cash flow still covered it in fiscal 2026, management has said it’s committed to it, and $770 a year on $10,000 is real money for anyone living on dividends today. It’s just that, when it comes down to it, I’d rather own the dividend that’s still growing, from a company that doesn’t have to choose between raises and paying down debt.
Of course, General Mills expects at least $750 million in cost savings in fiscal 2027. If those savings get its debt back to 3x faster, the raises could come back sooner.
So what is Altria 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!
