Investors often view the stock market as a vehicle for accumulating wealth through compound returns over time. However, there are those who focus on stocks as a source of passive income, particularly individuals looking to enhance their retirement income.
General Mills (NYSE:GIS) boasts an impressive history of 127 years without cutting its dividend, but it hasn’t consistently increased it every year. Therefore, it doesn’t qualify as part of the elite group known as dividend kings, which are companies that have raised their dividends annually for at least 50 years.
Could AI Produce the First Millionaire? Our team recently reported on an under-the-radar firm labeled an “essential monopoly” that supplies vital technology used by giants like Nvidia and Intel. Read more
Traditionally, General Mills was considered a reliable source of passive income. However, in recent years, that income hasn’t been enough to counteract declining stock prices. Over the past decade, General Mills has shown a total return of -12.4%, and the last three years were particularly tough, with a return of -48.9%.
The drop in share prices has resulted in a yield of 6.6%, which is its highest in decades.
So, why are high-dividend stocks worth considering right now?
General Mills is currently experiencing a slump in sales and profits, which mirrors a broader decline in the packaged food industry. Consumers seem to be really feeling the pinch, and companies like General Mills are facing challenges. The struggle to pass on rising costs to consumers continues.
On a broader scale, there’s a long-term shift in consumer preferences leaning towards healthier, unprocessed options. That said, General Mills has a strong brand lineup focused on breakfast and snacks, potentially giving it an edge over other firms in the industry.
Unfortunately, the data doesn’t paint a rosy picture, and forecasts from the company indicate a lack of immediate turnaround prospects.
On the upside, General Mills’ dividend is still manageable, and the stock appears quite low-priced.
Recently, on March 17, General Mills stated it would sell its Brazil operations to enhance its financial health and zero in on more lucrative ventures. The company has shed nearly a third of its portfolio through various acquisitions and divestitures since 2018, aiming to focus on its best-performing brands and product lines. This follows General Mills’ earlier announcement regarding the sale of its U.S. yogurt business, which includes well-known brands like Yoplait.
In spite of its challenges, General Mills has been able to increase its cash reserves, from $521.3 million as of February 23, 2025, to $785.5 million as of February 22, 2026, and it has also reduced its long-term debt from $11.84 billion to $10.99 billion. This improvement in the balance sheet seems likely to continue as cash flow increases through cost-cutting and a focus on more profitable segments.
According to General Mills’ fiscal year 2026 projections, the expected full-year free cash flow is $3.28 per share, significantly above its $2.44 per share dividend.
Interestingly, the stock price of $36.80 at the moment is under 11 times the anticipated earnings for FY2026.
For those who believe in strong brand loyalty, General Mills may present a buying opportunity, especially since its stock is currently quite cheap and it generates adequate cash flow to cover dividends and settle debts.
Realistically, it might take years for General Mills to regain meaningful growth, but the 6.6% yield makes holding onto the stock through this transition worthwhile.
Before making a decision to invest in General Mills, consider some important factors:
Motley Fool Stock Advisor Our analysts have identified what they believe are the 10 best stocks to consider for investment, and General Mills isn’t included in that list. These stocks have the potential for impressive returns in the upcoming years.
Consider this: Netflix‘s list was created on December 17, 2004… investing $1,000 back then would mean you have $503,861! Or how about Nvidia, recommended on April 15, 2005, where a $1,000 investment would now be worth $1,026,987!
Now, it’s worth noting that Stock Advisor boasts an impressive average return of 884%—far surpassing the S&P 500’s 179% in terms of market performance. Don’t miss our latest Top 10 stock picks; join an investing community tailored for retail investors.
*Stock Advisor will return on March 29, 2026.
Daniel Foelber has no positions in any of the mentioned stocks. The Motley Fool has no shares in any stocks mentioned. For further details, refer to our Disclosure policy.
