Key Takeaways
- General Mills yields 7.7% and Clorox yields 6.1%, and each raised its dividend less than 2% in its latest fiscal year.
- General Mills paid out 85% of its free cash flow in the twelve months to Aug. 30, 2026, and plans to hold its dividend flat while it pays down debt.
- Clorox paid out 149% of its free cash flow in fiscal 2026, and analysts expect that to fall to 71% in fiscal 2027.
- General Mills trades at 10.4x forward earnings, against 14.6x for Clorox.
Anyone hunting for income in consumer staples will run into two big yields right now: General Mills (GIS) at 7.7% and Clorox (CLX) at 6.1%.
General Mills said on Sept. 23 that it will hold its payout flat while it pays down debt. Clorox’s dividend cost more than its free cash flow in fiscal 2026, and its CFO said on Aug. 3 that this is “something more transitory.”
So which is the better high-yield dividend stock?
| Metric | General Mills (GIS) | Clorox (CLX) |
|---|---|---|
| Dividend yield | 7.7% | 6.1% |
| Dividend growth, fiscal 2021 to fiscal 2026 | 3.9% a year | 2.0% a year |
| Cash dividend payout ratio, TTM | 85% (to Aug. 30, 2026) | 149% (to June 30, 2026) |
| Cash dividend payout ratio, fiscal 2027 consensus | 76% | 71% |
| Net debt/EBITDA (LTM) | 3.67x | 4.29x |
| Interest coverage (LTM) | 4.94x | 6.84x |
| Forward P/E (NTM) | 10.4x | 14.6x |
Source: TIKR, prices at the Oct. 9, 2026 close.
General Mills: covered, and on pause
General Mills isn’t growing right now. Organic net sales were flat in the first quarter of fiscal 2027, which ended Aug. 30, and North America Retail is shrinking, with Big G cereal and U.S. snacks the weak spots.
The outlook for the full year doesn’t offer much relief either: management is guiding adjusted operating profit down 8% to 13% in constant currency, and adjusted EPS of $3.00 to $3.20, compared with $3.55 in fiscal 2026.
Free cash flow has covered the dividend in every fiscal year since 2017, though the cushion thinned in fiscal 2026…
The cash dividend payout ratio rose from 58.4% in fiscal 2025 to 80.9% in fiscal 2026. It sits at a tight but covered 85% over the twelve months to Aug. 30, 2026, and analysts expect it to ease to 76% in fiscal 2027.
That’s why CFO Kofi Bruce said the company expects to “maintain the current rate per share while we prioritize deleverage.” Net debt is 3.67x EBITDA on TIKR’s figures and a little over 4x on the company’s own, Bruce confirmed. He says it will take “at least a couple of years” to get back to the 3x target. So don’t count on raises soon: the dividend grew just 1.7% in fiscal 2026.
Clorox is paying more than it brings in, for now
Where General Mills has paused its raises, Clorox is still growing its dividend, which CFO Luc Bellet says “has increased annually for a decade.” It raised the quarterly payout to $1.25 from $1.24 on July 31. The cash behind it is weaker. In fiscal 2026, which ended June 30, net sales fell 5% to $6.72 billion and adjusted EPS fell 28% to $5.53. Household and Lifestyle shrank, while health and hygiene grew.
Free cash flow fell short of the dividend in three of the last five fiscal years…
Fiscal 2026 was the worst of them: $405 million of free cash flow against $602 million of dividends. That’s a 149% cash dividend payout ratio, which the business can’t carry for long. Even its $612 million of operating cash in fiscal 2026 barely covered the dividend. Debt is about $5.1 billion after buying GOJO on April 1 and a Glad stake, and S&P cut Clorox to BBB in February.
Bellet says “our commitment to support the dividend has not changed” and calls the elevated payout “something more transitory as we rebuild our gross margin and not something structural.” Consensus has free cash flow at $881 million in fiscal 2027, which would bring the ratio down to a comfortable 71%. Only four analysts make that cash flow call, though, and last year’s consensus missed the actual by 18%.
So which dividend wins?
If I had to pick one of the two high-yield dividend stocks, I’d take General Mills. The check is bigger, and the cash behind it is real: over the last twelve months, the dividend took 85% of free cash flow, compared with 149% at Clorox.
Even with General Mills’ raises on hold, the income math still favors it. Put $10,000 into General Mills and you collect $770 a year today. Put the same amount into Clorox and let it keep raising at its current pace, a 1.6% bump in fiscal 2026, and you’d still only be collecting about $706 a year by year 10.
Better yet, you’re not overpaying for that income…
At 10.4x forward earnings, after the stock fell almost 22% in September, General Mills sits far below its five-year average of 15.3x, close to its June 3, 2026 low of 9.7x.
This isn’t to say Clorox’s dividend is in trouble. Management has put it first, and its 6.84x interest coverage is wider than General Mills’ 4.94x. If free cash flow comes back as analysts expect, its 71% forward ratio even edges General Mills’ 76%. Still, Clorox’s coverage rests on a recovery that hasn’t happened yet, and General Mills’ coverage already shows in its cash flow.
Of course, General Mills’ own profit is guided lower this year. Its next couple of reports will show whether its cash flow holds up.
So what is General Mills stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what General Mills could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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!
