{"id":27397,"date":"2026-04-09T05:28:44","date_gmt":"2026-04-09T05:28:44","guid":{"rendered":"https:\/\/finderica.com\/?p=27397"},"modified":"2026-04-09T05:28:44","modified_gmt":"2026-04-09T05:28:44","slug":"general-mills-can-this-6-5-yielder-hang-in-there","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=27397","title":{"rendered":"General Mills: Can This 6.5% Yielder Hang in There?"},"content":{"rendered":"

We last looked at food maker General Mills<\/strong> (NYSE: GIS) in October.<\/p>\n

At the time, the stock had a generous 4.9% yield. Today, the yield is 6.5% \u2013 and it\u2019s not because the dividend has increased. The stock has been a disaster.<\/p>\n

The 26% drop in the price of General Mills shares over the past six months has caused the yield to climb significantly higher. As a result, some investors may be willing to sit and wait while they collect that big dividend.<\/p>\n

But is that dividend as reliable as a bowl of General Mills\u2019 Cheerios?<\/p>\n

In addition to the cereal that virtually every toddler in America has mushed into the couch, General Mills has many other household-name brands, like Betty Crocker, Cinnamon Toast Crunch, and Wheaties.<\/p>\n

When I analyzed General Mills\u2019 dividend safety in October, it received a \u201cD\u201d rating because free cash flow was falling.<\/p>\n

The situation hasn\u2019t gotten any better. In fact, it\u2019s worse. It\u2019s like expecting to be served Count Chocula and getting a heaping bowl of Raisin Nut Bran instead.<\/p>\n

Folks just aren\u2019t buying as much Green Giant, Lucky Charms, and Pillsbury as they used to. Revenue declined by half a billion dollars between fiscal 2023 and 2025. Wall Street expects sales to plummet even further from 2023\u2019s peak of $20.1 billion to $18.4 billion in fiscal 2026 and to $18 billion in 2027.<\/p>\n

That drop is hurting free cash flow, which is the lifeblood of dividends.<\/p>\n

Companies need to generate cash in order to pay shareholders.<\/p>\n

Earnings are nice, and they help to support a stock\u2019s price. But earnings include all kinds of noncash items, such as depreciation. Dividends are not paid out of earnings, but out of cash flow.<\/p>\n

In 2025, free cash flow dropped from $2.5 billion to $2.3 billion. At the time I covered General Mills in October, free cash flow was forecast to decline to less than $2.2 billion in fiscal 2026. Today, that projection has fallen all the way to below $1.8 billion.<\/p>\n

Last year, General Mills paid out 56.2% of its free cash flow in dividends. That\u2019s fine. I\u2019m good with anything below 75%.<\/p>\n

This year, if the forecasts are correct, General Mills will be bumping right up against that threshold with a 74.1% payout ratio. It\u2019s still okay, but it\u2019s getting a bit close for comfort.<\/p>\n

\"Chart:<\/a><\/p>\n

<\/a>General Mills does have a good dividend-paying track record. It has paid shareholders a dividend for 128 years and has raised the dividend every year since 2021.<\/p>\n

However, the drastically falling free cash flow means management may have some very tough decisions to make in the near future.<\/p>\n

Falling free cash flow is a cardinal sin in the Safety Net model, and the model is not merciful when it comes to dividend safety grades. If a company\u2019s free cash flow is falling and is not expected to get better, the dividend safety rating suffers mightily.<\/p>\n

That is the case with General Mills.<\/p>\n

Even though the company currently generates enough cash to pay the dividend, the rapidly deteriorating free cash flow means the dividend is not safe.<\/p>\n

Dividend Safety Rating: F<\/strong><\/p>\n

\"Dividend<\/p>\n

What stock\u2019s dividend safety would you like me to analyze next? Leave the ticker in the comments section.<\/p>\n

You can also take a look to see whether we\u2019ve written about your favorite stock recently. Just click on the word \u201cSearch\u201d at the top right part of the Wealthy Retirement<\/em> homepage, type in the company name, and hit \u201cEnter.\u201d<\/p>\n

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds, or closed-end funds.<\/p>\n

The post General Mills: Can This 6.5% Yielder Hang in There? appeared first on Wealthy Retirement.<\/p>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

We last looked at food maker General Mills (NYSE: GIS) in October. At the time, the stock had a generous 4.9% yield. Today, the yield is 6.5% \u2013 and it\u2019s not because the dividend has increased. The stock has been a disaster. The 26% drop in the price of General Mills shares over the past<\/p>\n","protected":false},"author":2,"featured_media":27398,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[348],"tags":[2548,10110,8391,3116],"class_list":{"0":"post-27397","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-retirement","8":"tag-general","9":"tag-hang","10":"tag-mills","11":"tag-yielder"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/27397","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27397"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/27397\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/27398"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27397"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27397"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27397"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}