General Mills Offers Shareholders 15 Consecutive Annual Dividend Hikes (GIS)
By: Ned Piplovic,
General Mills, Inc. (NYSE:GIS) has been delivering dividend distributions for 120 years and the company currently offers its shareholders a streak of 15 consecutive annual dividend hikes as well as an above-average yield.
In addition to a long streak of annual dividend hikes, the current dividend yield is holding substantially higher than company’s own five-year average. Also, General Mills’ current yield outperformed the average dividend yields of its peers by a wide margin. The company’s share price also reversed its steep decline from 2016 and 2017 to contribute to the rising dividend payouts for double-digit-percentage total returns over the past 12 months.
In addition to working on increasing revenues and generating higher returns from its current divisions and product line, General Mills completed the acquisition of pet food maker Blue Buffalo in the second quarter of 2018. General Mills anticipates strong contributions to its financial results from the new division whose annual net sales are expected to grow approximately 10% over the next few years.
Therefore, investors should consider taking a closer look at such an established company with a long record of consecutive annual dividend hikes and a resurging share price. As always, investors must conduct their own due diligence to confirm that General Mills’ current financial characteristics align with investor’s own portfolio requirements and their overall investment strategy. Additionally, all interested investors who wish to receive the next round of dividend distributions, must claim stock ownership prior to the company’s upcoming ex-dividend date on April 9, 2019. General Mills will distribute its next quarterly dividend on the May 1, 2019, pay date to all shareholders of record prior to the ex-dividend date.
Bank of America Corporation (NYSE:GIS)
Based in Minneapolis, Minnesota, General Mills, Inc. was created in 19https://www.dividendinvestor.com/dividend-quote/GD/28 when the Washburn-Crosby Company merged with 28 other regional mills to form General Mills. The company manufactures and markets branded consumer foods, such as ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen food products, shelf stable and frozen vegetables, ice cream and frozen desserts. Additionally, the company offers grain, fruit and savory snacks as well as various organic products, including nutrition bars, meal kits and salty snacks. Some of the company’s largest and most recognizable brands include Betty Crocker, Häagen-Dazs, Yoplait, Old El Paso, Pillsbury, Progresso, Annie’s and Bisquick. Additionally, the company owns multiple ready-to-eat cereal brands, such as Cheerios, Chex, Wheaties, Lucky Charms, Cocoa Puffs, Kix, Cookie Crisp, Fiber One and Trix. The company also operates 55% of its nearly 800 branded ice cream parlors with the remaining parlors operated as franchise stores. While best known for its cereals, in 2018 the company generated the largest share of its sales from snacks (22%) and only 17% of its revenue from cereals. The company generated another 17% of its revenue from its Convenient Meals and 15% from its yogurt division. These four segments account for more than 70% of the company’s revenue.
The company’s current quarterly dividend payout amount is $0.49. This quarterly distribution is equivalent to an annualized payout of $1.96 per share and a 3.84% forward dividend yield. While lower than its recent levels above 4%, the current dividend yield is still 12.4% higher than the company’s own 3.42% average yield over the past five years.
In addition to trending ahead its own five-year average, General Mills’ current yield is also more than double the 1.86% average yield of the entire Consumer goods sector, as well as twice the 1.84% simple-average yield all the companies in the Processed & Packaged Goods industry segment. Additionally, General Mills has the third-highest yield in the industry segment. As such, GIS’s current 3.84% yield is also 18.3% higher than the 3.25% simple average of the segment’s only dividend-paying companies.
In addition to a long streak of consecutive annual dividend hikes, General Mills maintains substantial dividend growth rates. Over the past 15 years of consecutive annual dividend hikes, the company has enhanced its total annual dividend more than 250%. This level of dividend enhancement corresponds to an average annual growth rate of 8.8% per year.
The share price decline in 2016 and 2017 limited total returns on shareholders’ investment to just 17% over the past five years. Moreover, that price drop had an even bigger impact on the three-year period, which delivered a 13% total loss. However, as the share price reversed trend and delivered positive gains over the past year, the General Mills delivered a 19.5% total return over the past 12 months.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.