Could Buying High-Yield General Mills Today Set You Up for Life?

Key Points

• General Mills is not a Dividend King -- its dividend streak is just five years long.

• The company is a consumer-staples giant, with a portfolio of important and well-known brands.

• General Mills has a 4.8% yield today, and a long history of returning value to shareholders.

• 10 stocks we like better than General Mills ›

General Mills (NYSE: GIS) has an unusual dividend story. It has a less-than-inspiring dividend streak of just five annual increases, but at the same time, it has paid dividends without interruption for 127 years.

Some investors get caught up in only buying stocks with long strings of dividend increases, which is understandable. But if you're a dividend lover, you should really do a deep dive on General Mills. The lofty 4.8% yield here could, indeed, set you up for a lifetime of income even if the dividend doesn't increase every single year.

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What does General Mills do?

General Mills is a consumer staples maker with a focus on packaged food products. Although it isn't among the largest consumer staples companies in the world, with a market cap of around $27 billion, it's still a big and important player in the packaged-food sector. It has the size and scale needed to stand toe to toe with just about any competitor with regard to distribution, research and development, and marketing. It can also act as an industry consolidator, buying up smaller competitors to keep its brand portfolio up to date with consumer tastes.

Image source: Getty Images.

That's actually an important factor to consider. While General Mills is, technically, a food maker, it's more appropriate to view it as a brand manager. It has a long and successful history of acquiring, operating, and disposing of brands.

Its most recent big acquisition was Blue Buffalo pet food, which was the leading brand of natural pet food when General Mills added it to its portfolio. The company has since made bolt-on acquisitions within the pet-food business it created when it bought Blue Buffalo.

There have been a number of brand dispositions lately as General Mills reworks its portfolio, including the sale of its entire yogurt business. That exit was a multistep process spread over several years, highlighting the long-term focus this consumer staples company takes when making portfolio changes, in both buying and selling.

The slow and steady approach management takes with the portfolio is what has supported the company's ability to pay an uninterrupted dividend for 127 years. That's an incredible record that suggests you can count on General Mills to set you up for a lifetime of income. Add in the lofty 4.8% dividend yield, and the story looks even more compelling.

GIS Dividend data by YCharts.

What's going on with General Mills today?

Some investors are only willing to look at companies with long histories of dividend increases behind them, like Dividend Kings. That's understandable, but it means missing out on great businesses like General Mills. Notably, even though the dividend streak is only five years long, the company has offered a generally rising dividend for decades. It has simply paused the dividend during periods of difficulty or dramatic change, such as when it bought Blue Buffalo.

That brings the story back to the 4.8% dividend yield, which is up toward the high end of the stock's historical yield range. In fact, the last time the yield was this high was when General Mills bought Blue Buffalo. The worry then was that the company had bitten off more than it could chew, which turned out to be an overblown fear. This time around the concerns are broader, as a new administration in Washington and shifts in consumer preferences have the world rethinking its food choices. Packaged-food makers like General Mills are on the back foot, for now, as consumers seek out "healthier" foods.

For example, General Mills' organic sales were down 2% in fiscal 2025, with adjusted earnings per share down by 7%. That's not great, but it's hardly a death knell for this business. In fact, the board of directors increased the dividend by a token penny a share in August, a sign that the company believes it will get through the current headwinds in relative stride. A history of more than 127 years of reliably paying dividends suggests you should believe that General Mills will, in fact, do just that.

General Mills has a high-yield stock and a consistent business

In some ways, General Mills moves to its own drummer when it comes to paying dividends. Without a long streak of regular annual dividend hikes, a lot of investors will skip right over it. That's a mistake, particularly given the lofty yield it currently offers.

This well-run brand manager is highly likely to support the dividend through whatever headwinds it faces right now, while adjusting as needed to provide consumers with the products they want. For example, it just added a Mexican-food-themed brand to its portfolio.

If you can step back and look at the whole picture, and don't get myopically focused on the near-term performance of the business, you could set yourself up with a lifetime of dividends by buying General Mills today.

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Reuben Gregg Brewer has positions in General Mills. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.