Even With Elon Musk's SpaceX Stock (SPCX) Down Below Its IPO Price, I'd Still Rather Buy This Dividend Stock in July

There's been a lot of attention paid to Elon Musk's company Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, and excitement over its debut on the stock market in June via an initial public offering (IPO). It was a huge IPO, raising some $75 billion and seeing the stock surge 19% to $193 on its first day. But the stock has struggled since and was recently below its IPO price, trading near $126 on July 17.

Should you invest in SpaceX now? Well, you could. But I think there's a better stock to buy.

Image source: Getty Images.

Consider General Mills

Food giant General Mills (NYSE: GIS) is close to the opposite of SPX Technologies. Founded 160 years ago, in 1866, it's grown to be a powerhouse in the food sector, with brands such as Annie's, Betty Crocker, Bisquick, Cascadian Farm, Cheerios, Chex, Cinnamon Toast Crunch, Gold Medal, Green Giant, Kix, Larabar, Nature Valley, Old El Paso, Progresso, Totino's, Wanchai Ferry, and Wheaties -- among many others.

Why invest in this specialist in cereals and much more? Well, several reasons:

First, it's a solid dividend-paying stock, with a boffo recent dividend yield of 6.3%. Better still, the company has also been repurchasing shares (which rewards shareholders by making remaining shares more valuable), sending its total shareholder yield up to a recent 8.7%. (General Mills has paid a dividend for 127 consecutive years.)

The stock is also looking undervalued, with a recent forward-looking price-to-earnings (P/E) ratio of 12.5, well below the five-year average of 15, and a price-to-sales ratio of 1.1, well below the five-year average of 1.8.

The stock is appealingly priced, largely because it has fallen lately -- averaging annual losses of 15% over the past three years. In its third-quarter report, management pointed to several issues that affected its third quarter: retailer inventories and weather-related supply chain disruptions, along with brand-improving investments, divestitures, and unfavorable trade expense timing, among others. It noted, though, that these "timing headwinds [are] expected to become tailwinds in Q4."

In the fourth quarter, CEO Jeff Harmening pointed to a continuing turnaround:

We are laser focused on increasing our efficiency to help offset elevated inflation, fund our growth investments, and generate stronger earnings and cash flow. ... We're targeting $3 billion in cumulative cost savings by fiscal 2030. ... I'm confident we're on the path to restoring profitable growth and driving shareholder value over the long term.

Recession resistance

Here's a last reason to consider General Mills: Many are worrying about a stock market crash coming this year or soon, potentially with a recession following. If that does happen, it's often high-flying growth stocks that will fall most sharply. The companies that tend to hold their value relatively well are defensive ones -- those selling things that everyone needs. In a recession, you might put off getting a new car or dishwasher, but you'll still pay for electricity and your medications, as well as your Cheerios and Green Giant veggies.

Given all that, I'd much rather invest in General Mills than SpaceX.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.