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Key Takeaways:
- General Mills offers a 4.8% dividend yield, its highest in over a decade, driven largely by a 20%+ stock decline and supported by strong free cash flow and a conservative payout strategy.
- Earnings are expected to fall from their 2024 peak as softer demand and rising costs weigh on margins, though management continues to prioritize dividend stability.
- While growth may be harder to come by, GIS still offers steady income backed by 126 years of uninterrupted dividends and a projected 66% payout ratio by fiscal 2027.
General Mills is behind some of the most iconic brands in your pantry, including Cheerios, Häagen-Dazs, Betty Crocker, and Nature Valley. It’s a consumer staple giant with a reputation for steady performance and dependable cash flow.
But the stock has had a rough stretch. Shares have fallen over 20% in the past year as higher input inflation and increased marketing spend have pressured margins, while volume declines in key categories like snacks and cereal reflect a pullback in consumer spending.
Still, free cash flow remains healthy, margins are starting to improve, and the dividend yield is now one of the highest in the sector at 4.8%.
GIS isn’t a growth story right now, but for long-term dividend investors, it could still play a valuable role in a balanced portfolio.
Analysts Think the Stock is Undervalued Today
General Mills shares are trading around $51, but based on analysts’ consensus estimates in TIKR’s valuation model, the stock could rebound to about $65.37 by mid-2028.
That suggests potential upside of 28.3% (including dividends), or roughly 9.1% annually, if earnings normalize and investor sentiment improves.
Margins remain healthy at over 16%, and analysts expect them to stay stable as input costs ease and pricing actions take hold.
The company is leaning into premium product lines, optimizing its portfolio, and expanding its international presence.
Those efforts could help drive modest revenue growth and rebuild investor confidence, especially if General Mills continues to deliver strong cash flow and protect profitability.
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Dividend Yield Is at a Decade High
General Mills offers a forward dividend yield of 4.8%, well above its 5-year average of 3.4% and the highest it’s been in over a decade.
The higher yield mainly reflects the stock’s recent decline. Many households have traded down to private labels or cut back on premium grocery items, putting temporary pressure on volumes across the industry.
Still, GIS has continued growing its dividend. The company currently pays $2.36 per share annually, and analysts expect that to rise to $2.54 by fiscal 2027.
That steady increase is supported by strong free cash flow and disciplined capital allocation.
With healthy margins and a portfolio of trusted brands, General Mills remains one of the more dependable dividend options in the consumer staples space.
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Dividend Looks Safe, but Growth Will Be Harder to Come By
General Mills is expected to earn $3.82 per share and raise its dividend to $2.54 by fiscal 2027. That would push the payout ratio to around 66%, still well within a manageable range supported by steady free cash flow and a conservative financial strategy.
But the decline in earnings from a peak of $4.52 in fiscal 2024 to $3.82 in 2027 reflects real challenges. Revenues have come under pressure as consumers trade down to cheaper private-label brands and cut back on discretionary grocery categories. At the same time, inflation has pushed up costs, while promotional spending and innovation initiatives are weighing on near-term margins.
For investors, this reset in earnings power suggests that General Mills may be entering a slower-growth phase. While the dividend appears secure and capable of modest growth, total returns could remain muted unless volume growth and pricing power improve meaningfully.
The company is leaning into premium segments like pet food and convenient snacking, where brand strength still matters. It’s also investing in new products and operational efficiencies to protect margins and reposition itself for future demand.
General Mills has paid uninterrupted dividends for over 126 years, reinforcing its reputation as one of the most reliable income stocks in the consumer staples sector.
See General Mills’ full growth forecast and analyst estimates. (It’s free) >>>
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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 stocks mentioned. Thank you for reading, and happy investing!
