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General Mills (GIS) is a Top Dividend Stock Right Now: Should You Buy?
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
General Mills in Focus
Based in Minneapolis, General Mills (GIS - Free Report) is in the Consumer Staples sector, and so far this year, shares have seen a price change of 9.56%. Currently paying a dividend of $0.54 per share, the company has a dividend yield of 2.93%. In comparison, the Food - Miscellaneous industry's yield is 0.24%, while the S&P 500's yield is 1.65%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.16 is up 5.9% from last year. Over the last 5 years, General Mills has increased its dividend 2 times on a year-over-year basis for an average annual increase of 1.13%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. General Mills's current payout ratio is 52%. This means it paid out 52% of its trailing 12-month EPS as dividend.
GIS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $4 per share, which represents a year-over-year growth rate of 1.52%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GIS presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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General Mills (GIS) is a Top Dividend Stock Right Now: Should You Buy?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
General Mills in Focus
Based in Minneapolis, General Mills (GIS - Free Report) is in the Consumer Staples sector, and so far this year, shares have seen a price change of 9.56%. Currently paying a dividend of $0.54 per share, the company has a dividend yield of 2.93%. In comparison, the Food - Miscellaneous industry's yield is 0.24%, while the S&P 500's yield is 1.65%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.16 is up 5.9% from last year. Over the last 5 years, General Mills has increased its dividend 2 times on a year-over-year basis for an average annual increase of 1.13%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. General Mills's current payout ratio is 52%. This means it paid out 52% of its trailing 12-month EPS as dividend.
GIS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $4 per share, which represents a year-over-year growth rate of 1.52%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GIS presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).