Key Takeaways
- General Mills yields 7.7% and Verizon yields 6.8%, but General Mills plans to hold its dividend flat while it pays down debt.
- General Mills’ bigger yield comes with thinner coverage: dividends took 85% of its free cash flow over the twelve months to Aug. 30, 2026, against 54% at Verizon over the twelve months to June 30, 2026.
- General Mills’ normalized EPS fell from $4.52 in fiscal 2024 to $3.55 in fiscal 2026, and management guides for adjusted EPS of $3.00 to $3.20 in fiscal 2027.
- $10,000 invested today pays $770 a year from General Mills and $680 from Verizon.
General Mills (GIS) yields 7.7% today. But on Sept. 23, CFO Kofi Bruce told investors not to expect a raise soon: “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.”
Verizon (VZ) yields a smaller 6.8% after an 8.7% drop on Oct. 9, but its dividend is still growing. Its January 2026 raise added $0.07 a share to the annual payout, a 2.5% increase, and management said it “marks the 20th consecutive year of dividend increases, a track record we’re extremely proud of.”
Both companies carry more than 3x net debt to EBITDA, so each dividend competes with debt paydown for the same cash. Which one makes the better high-yield dividend stock?
| Metric | Verizon (VZ) | General Mills (GIS) |
|---|---|---|
| Dividend yield | 6.8% | 7.7% |
| Yield at the current rate | 6.8% | 7.6% |
| Dividend growth, 5 years | 1.9% a year (fiscal 2020–2025) | 3.9% a year (fiscal 2021–2026) |
| Cash dividend payout ratio, TTM | 54% (to June 30, 2026) | 85% (to Aug. 30, 2026) |
| Cash dividend payout ratio, forward | 54% (fiscal 2026 consensus) | 76% (fiscal 2027 consensus) |
| Net debt/EBITDA | 3.35x | 3.67x |
| Interest coverage (EBIT/interest) | 4.36x | 4.94x |
Verizon’s free cash flow is climbing
Over the twelve months to June 30, 2026, Verizon’s dividend cost $11.63 billion, a well-covered 54% of its $21.53 billion of free cash flow. Consensus puts the fiscal 2026 ratio at 54% as well, with management guiding for free cash flow to grow 9% to 10% this year.
That cash has topped the dividend every year since fiscal 2018.
The tightest year was fiscal 2022, when dividends took 77% of free cash flow.
The business is growing where it counts. Mobility and broadband service revenue rose 2.8% to $23.4 billion in the second quarter of 2026, compared with the same quarter of 2025.
The risk is the debt, which shares cash with the dividend and up to $4.5 billion of buybacks this year. Management put it plainly on the call: “We are growing our dividend, and we are paying down our debt.”
The newest risk is competition. SpaceX agreed on Oct. 8 to buy nationwide low-band spectrum for its Starlink phone service, and Verizon’s stock fell 8.7% the next day. The deal still needs the FCC’s approval, and Verizon says spectrum alone “does not provide the network or infrastructure to offer true nationwide coverage.” It’s a threat to the business behind the dividend, not yet a dent in its cash.
General Mills is holding the line
General Mills faces the same debt balancing act, with much less room. Over the twelve months to Aug. 30, 2026, its dividend took a tight 85% of free cash flow. Analysts expect a modest recovery, bringing the fiscal 2027 ratio down to 76%.
Free cash flow fell from $2.53 billion in fiscal 2024 to $1.63 billion in fiscal 2026 (the year ended May 2026), while dividends held near $1.3 billion.
That pushed the payout ratio from 54% in fiscal 2024 to 81% in fiscal 2026.
In the quarter ended Aug. 30, 2026, net sales fell 3% from a year earlier to $4.4 billion, mainly because of the U.S. yogurt divestiture. Organic sales were flat.
Leverage sits at 3.67x, and Bruce expects it will take “at least a couple of years to work ourselves back to our target of 3x net debt to EBITDA.” A new CEO, COO Dana McNabb, takes over on Jan. 1, 2027.
So which dividend wins?
Verizon is the better high-yield dividend stock. For me, the deciding factor is room to keep growing the dividend: Verizon pays out 54% of free cash flow today and on forward estimates, with free cash flow guided to grow 9% to 10% this year.
General Mills’ case is the bigger check today. $10,000 in its stock pays $770 a year today, against $680 from Verizon. At the pace of each company’s latest raise, General Mills would still pay about $894 in year 10, compared with about $777 from Verizon. But that pace assumes raises that management has put on hold, and the earnings behind the dividend are still shrinking.
Management’s fiscal 2027 range of $3.00 to $3.20 sits around the $3.08 consensus, so the latest quarter gives analysts no reason to expect a faster recovery.
This isn’t to say General Mills’ dividend is in danger. Management is “fully committed” to it, the forward payout ratio improves to 76%, and General Mills covers its interest a bit better than Verizon does. It’s just that I’d rather own the dividend that’s still growing, with plenty of cash behind it.
Of course, if General Mills gets its leverage back to 3x faster than it expects, the raises could return sooner.
So what is Verizon 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!
