General Mills Inc (NYSE:GIS) announced it would increase its dividend to $0.54

GeneralMills, Inc. (NYSE: GIS) The dividend will increase on August 1 to $0.54, with investors receiving 5.9% more than last year. Based on the announced payout, the dividend yield for the company will be 2.7%, which is fairly typical for the industry.

See our latest analysis for General Mills

General Mills payment has strong revenue coverage

We like to see a healthy dividend yield, but that only helps us if the payout can continue. The last dividend was quite easily covered by the profits of General Mills. This means that a large portion of his income is kept to grow the business.

Over the next year, EPS is expected to fall by 11.4%. If the dividend continues on the path it has been on recently, we estimate the payout ratio could be 53%, which is comfortable for the business to continue in the future.

NYSE: Historic GIS Dividend July 2, 2022

General Mills has a strong track record

Even over a long history of paying dividends, the company’s distributions have been remarkably stable. The dividend increased from US$1.22 in 2012 to the last annual payment of US$2.04. This means that it increased its distributions by 5.3% per year during this period. Companies like this can be very valuable in the long run, if the decent growth rate can be maintained.

General Mills could increase its dividend

Some investors will be eager to buy some of the company’s stock based on its dividend history. It is encouraging to see that General Mills has increased its earnings per share by 9.9% per year over the past five years. With earnings per share growing at an acceptable pace and a balanced payout policy, we believe the company is well positioned to grow earnings and dividends going forward.

General Mills looks like a big dividend stock

Overall, we think it could be an attractive income stock, and it’s only getting better by paying a higher dividend this year. The company generates a lot of cash, and the earnings also quite easily cover the distributions. If earnings fall over the next 12 months, the dividend could be shaken up a bit, but we don’t think that should cause too much of a problem in the long run. All of these factors taken into account, we believe this has strong potential as a dividend-paying stock.

Investors generally tend to favor companies with a consistent and stable dividend policy as opposed to those with an irregular one. Meanwhile, despite the importance of dividend payouts, these are not the only factors our readers should be aware of when evaluating a company. For example, we chose 1 warning sign for General Mills that investors should be aware of before committing capital to this security. Isn’t General Mills quite the opportunity you’ve been looking for? Why not check out our selection of the best dividend stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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