GENERAL MILLS INC (GIS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GIS - US3703341046 - Common Stock
44.53 USD
+0.18 (+0.41%)
We assign a fundamental rating of 4 out of 10 to GIS. GIS was compared to 87 industry peers in the Food Products industry. While GIS has a great profitability rating, there are quite some concerns on its financial health. GIS has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- In the past year GIS was profitable.
- GIS had a positive operating cash flow in the past year.
- GIS had positive earnings in each of the past 5 years.
- In the past 5 years GIS always reported a positive cash flow from operatings.
1.2 Ratios
- GIS's Return On Assets of 7.79% is amongst the best of the industry. GIS outperforms 89.66% of its industry peers.
- GIS has a better Return On Equity (27.23%) than 96.55% of its industry peers.
- With an excellent Return On Invested Capital value of 9.65%, GIS belongs to the best of the industry, outperforming 87.36% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for GIS is significantly below the industry average of 27.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.79% | ||
| ROE | 27.23% | ||
| ROIC | 9.65% |
ROA(3y)7.71%
ROA(5y)7.84%
ROE(3y)25.45%
ROE(5y)25.35%
ROIC(3y)10.86%
ROIC(5y)11.02%
1.3 Margins
- The Profit Margin of GIS (13.51%) is better than 96.55% of its industry peers.
- GIS's Profit Margin has been stable in the last couple of years.
- GIS's Operating Margin of 15.95% is amongst the best of the industry. GIS outperforms 93.10% of its industry peers.
- GIS's Operating Margin has been stable in the last couple of years.
- The Gross Margin of GIS (33.83%) is better than 74.71% of its industry peers.
- In the last couple of years the Gross Margin of GIS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.95% | ||
| PM (TTM) | 13.51% | ||
| GM | 33.83% |
OM growth 3Y-0.79%
OM growth 5Y0.02%
PM growth 3Y-6.16%
PM growth 5Y-0.98%
GM growth 3Y0.86%
GM growth 5Y-0.37%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so GIS is still creating some value.
- GIS has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for GIS has been reduced compared to 5 years ago.
- Compared to 1 year ago, GIS has a worse debt to assets ratio.
2.2 Solvency
- GIS has an Altman-Z score of 2.36. This is not the best score and indicates that GIS is in the grey zone with still only limited risk for bankruptcy at the moment.
- GIS has a Altman-Z score (2.36) which is in line with its industry peers.
- GIS has a debt to FCF ratio of 7.70. This is a slightly negative value and a sign of low solvency as GIS would need 7.70 years to pay back of all of its debts.
- GIS has a Debt to FCF ratio of 7.70. This is in the better half of the industry: GIS outperforms 65.52% of its industry peers.
- A Debt/Equity ratio of 1.31 is on the high side and indicates that GIS has dependencies on debt financing.
- The Debt to Equity ratio of GIS (1.31) is worse than 79.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | 7.7 | ||
| Altman-Z | 2.36 |
ROIC/WACC1.46
WACC6.6%
2.3 Liquidity
- GIS has a Current Ratio of 0.66. This is a bad value and indicates that GIS is not financially healthy enough and could expect problems in meeting its short term obligations.
- GIS's Current ratio of 0.66 is on the low side compared to the rest of the industry. GIS is outperformed by 87.36% of its industry peers.
- A Quick Ratio of 0.39 indicates that GIS may have some problems paying its short term obligations.
- GIS has a worse Quick ratio (0.39) than 81.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.39 |
3. Growth
3.1 Past
- The earnings per share for GIS have decreased strongly by -20.43% in the last year.
- The Earnings Per Share has been growing slightly by 3.12% on average over the past years.
- The Revenue has decreased by -5.65% in the past year.
- The Revenue has been growing slightly by 2.03% on average over the past years.
EPS 1Y (TTM)-20.43%
EPS 3Y2.23%
EPS 5Y3.12%
EPS Q2Q%-21.43%
Revenue 1Y (TTM)-5.65%
Revenue growth 3Y0.86%
Revenue growth 5Y2.03%
Sales Q2Q%-7.24%
3.2 Future
- The Earnings Per Share is expected to grow by 0.16% on average over the next years.
- Based on estimates for the next years, GIS will show a decrease in Revenue. The Revenue will decrease by -0.06% on average per year.
EPS Next Y-11.89%
EPS Next 2Y-5.35%
EPS Next 3Y-1.68%
EPS Next 5Y0.16%
Revenue Next Year-4.51%
Revenue Next 2Y-2.63%
Revenue Next 3Y-1.13%
Revenue Next 5Y-0.06%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 12.04, GIS is valued correctly.
- Based on the Price/Earnings ratio, GIS is valued a bit cheaper than 79.31% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.60. GIS is valued rather cheaply when compared to this.
- With a Price/Forward Earnings ratio of 11.81, the valuation of GIS can be described as very reasonable.
- GIS's Price/Forward Earnings ratio is rather cheap when compared to the industry. GIS is cheaper than 81.61% of the companies in the same industry.
- GIS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.04 | ||
| Fwd PE | 11.81 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as GIS.
- 77.01% of the companies in the same industry are more expensive than GIS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.33 | ||
| EV/EBITDA | 10.36 |
4.3 Compensation for Growth
- The decent profitability rating of GIS may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.85
EPS Next 2Y-5.35%
EPS Next 3Y-1.68%
5. Dividend
5.1 Amount
- GIS has a Yearly Dividend Yield of 5.48%, which is a nice return.
- Compared to an average industry Dividend Yield of 2.29, GIS pays a better dividend. On top of this GIS pays more dividend than 85.06% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, GIS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.48% |
5.2 History
- The dividend of GIS has a limited annual growth rate of 4.25%.
- GIS has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.25%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- GIS pays out 52.10% of its income as dividend. This is a bit on the high side, but may be sustainable.
- The dividend of GIS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP52.1%
EPS Next 2Y-5.35%
EPS Next 3Y-1.68%
GENERAL MILLS INC / GIS FAQ
What is the fundamental rating for GIS stock?
ChartMill assigns a fundamental rating of 4 / 10 to GIS.
What is the valuation status of GENERAL MILLS INC (GIS) stock?
ChartMill assigns a valuation rating of 6 / 10 to GENERAL MILLS INC (GIS). This can be considered as Fairly Valued.
How profitable is GENERAL MILLS INC (GIS) stock?
GENERAL MILLS INC (GIS) has a profitability rating of 7 / 10.
What is the financial health of GENERAL MILLS INC (GIS) stock?
The financial health rating of GENERAL MILLS INC (GIS) is 3 / 10.
Can you provide the expected EPS growth for GIS stock?
The Earnings per Share (EPS) of GENERAL MILLS INC (GIS) is expected to decline by -11.89% in the next year.