GENERAL MILLS INC (GIS) Stock Fundamental Analysis
NYSE:GIS - New York Stock Exchange, Inc. - US3703341046 - Common Stock - Currency: USD
GIS gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 91 industry peers in the Food Products industry. GIS scores excellent on profitability, but there are concerns on its financial health. GIS has a correct valuation and a medium growth rate. Finally GIS also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year GIS was profitable.
In the past year GIS had a positive cash flow from operations.
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
The Return On Assets of GIS (6.94%) is better than 81.32% of its industry peers.
Looking at the Return On Equity, with a value of 24.95%, GIS belongs to the top of the industry, outperforming 95.60% of the companies in the same industry.
The Return On Invested Capital of GIS (10.39%) is better than 83.52% of its industry peers.
GIS had an Average Return On Invested Capital over the past 3 years of 10.86%. This is significantly below the industry average of 28.10%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.94% | ||
| ROE | 24.95% | ||
| ROIC | 10.39% |
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
GIS's Profit Margin of 11.78% is amongst the best of the industry. GIS outperforms 92.31% of its industry peers.
GIS's Profit Margin has been stable in the last couple of years.
The Operating Margin of GIS (17.24%) is better than 92.31% of its industry peers.
In the last couple of years the Operating Margin of GIS has remained more or less at the same level.
Looking at the Gross Margin, with a value of 34.60%, GIS is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
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 | 17.24% | ||
| PM (TTM) | 11.78% | ||
| GM | 34.6% |
OM growth 3Y-0.78%
OM growth 5Y0.01%
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.
Compared to 1 year ago, GIS has less shares outstanding
The number of shares outstanding for GIS has been reduced compared to 5 years ago.
The debt/assets ratio for GIS is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.44 indicates that GIS is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of GIS (2.44) is comparable to the rest of the industry.
GIS has a debt to FCF ratio of 6.49. This is a slightly negative value and a sign of low solvency as GIS would need 6.49 years to pay back of all of its debts.
The Debt to FCF ratio of GIS (6.49) is better than 74.73% of its industry peers.
A Debt/Equity ratio of 1.45 is on the high side and indicates that GIS has dependencies on debt financing.
The Debt to Equity ratio of GIS (1.45) is worse than 82.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.45 | ||
| Debt/FCF | 6.49 | ||
| Altman-Z | 2.44 |
ROIC/WACC1.5
WACC6.95%
2.3 Liquidity
A Current Ratio of 0.67 indicates that GIS may have some problems paying its short term obligations.
GIS has a worse Current ratio (0.67) than 87.91% of its industry peers.
A Quick Ratio of 0.43 indicates that GIS may have some problems paying its short term obligations.
GIS has a worse Quick ratio (0.43) than 81.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
The earnings per share for GIS have decreased by -6.86% in the last year.
GIS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.12% yearly.
The Revenue has decreased by -1.87% in the past year.
Measured over the past years, GIS shows a small growth in Revenue. The Revenue has been growing by 2.03% on average per year.
EPS 1Y (TTM)-6.86%
EPS 3Y2.23%
EPS 5Y3.12%
EPS Q2Q%-26.73%
Revenue 1Y (TTM)-1.87%
Revenue growth 3Y0.86%
Revenue growth 5Y2.03%
Sales Q2Q%-3.35%
3.2 Future
Based on estimates for the next years, GIS will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.53% on average per year.
The Revenue is expected to grow by 3.61% on average over the next years.
EPS Next Y-12.32%
EPS Next 2Y-4.48%
EPS Next 3Y-0.8%
EPS Next 5Y9.53%
Revenue Next Year-4.09%
Revenue Next 2Y-2.25%
Revenue Next 3Y-0.73%
Revenue Next 5Y3.61%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 11.90, the valuation of GIS can be described as reasonable.
Based on the Price/Earnings ratio, GIS is valued a bit cheaper than the industry average as 75.82% of the companies are valued more expensively.
GIS is valuated cheaply when we compare the Price/Earnings ratio to 27.50, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.57, which indicates a correct valuation of GIS.
Based on the Price/Forward Earnings ratio, GIS is valued a bit cheaper than the industry average as 72.53% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of GIS to the average of the S&P500 Index (36.44), we can say GIS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.9 | ||
| Fwd PE | 13.57 |
4.2 Price Multiples
GIS's Enterprise Value to EBITDA ratio is in line with the industry average.
GIS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GIS is cheaper than 80.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.85 | ||
| EV/EBITDA | 10.55 |
4.3 Compensation for Growth
GIS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.81
EPS Next 2Y-4.48%
EPS Next 3Y-0.8%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.75%, GIS is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.72, GIS pays a better dividend. On top of this GIS pays more dividend than 85.71% of the companies listed in the same industry.
GIS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.75% |
5.2 History
The dividend of GIS has a limited annual growth rate of 4.26%.
GIS has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.26%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
58.33% of the earnings are spent on dividend by GIS. This is a bit on the high side, but may be sustainable.
GIS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP58.33%
EPS Next 2Y-4.48%
EPS Next 3Y-0.8%
50.1
-0.19 (-0.38%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners86.44%
Inst Owner Change0.01%
Ins Owners0.24%
Ins Owner Change3.74%
Market Cap27.18B
Analysts66.15
Price Target61.41 (22.57%)
Short Float %5.38%
Short Ratio5.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.75% |
Yearly Dividend2.43
Dividend Growth(5Y)4.26%
DP58.33%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.21%
Min EPS beat(2)3.07%
Max EPS beat(2)3.36%
EPS beat(4)4
Avg EPS beat(4)5.08%
Min EPS beat(4)0.06%
Max EPS beat(4)13.83%
EPS beat(8)7
Avg EPS beat(8)4.84%
EPS beat(12)11
Avg EPS beat(12)4.87%
EPS beat(16)14
Avg EPS beat(16)4.93%
Revenue beat(2)0
Avg Revenue beat(2)-2.51%
Min Revenue beat(2)-3.37%
Max Revenue beat(2)-1.66%
Revenue beat(4)1
Avg Revenue beat(4)-1.03%
Min Revenue beat(4)-3.37%
Max Revenue beat(4)0.93%
Revenue beat(8)2
Avg Revenue beat(8)-1.47%
Revenue beat(12)3
Avg Revenue beat(12)-1.24%
Revenue beat(16)6
Avg Revenue beat(16)-0.48%
PT rev (1m)-2.43%
PT rev (3m)-4.2%
EPS NQ rev (1m)-13.48%
EPS NQ rev (3m)-15.34%
EPS NY rev (1m)-9.23%
EPS NY rev (3m)-10.01%
Revenue NQ rev (1m)-2%
Revenue NQ rev (3m)-2.48%
Revenue NY rev (1m)-2.4%
Revenue NY rev (3m)-2.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.9 | ||
| Fwd PE | 13.57 | ||
| P/S | 1.39 | ||
| P/FCF | 11.85 | ||
| P/OCF | 9.31 | ||
| P/B | 2.95 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.55 |
EPS(TTM)4.21
EY8.4%
EPS(NY)3.69
Fwd EY7.37%
FCF(TTM)4.23
FCFY8.44%
OCF(TTM)5.38
OCFY10.74%
SpS35.92
BVpS16.96
TBVpS-24.9
PEG (NY)N/A
PEG (5Y)3.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.94% | ||
| ROE | 24.95% | ||
| ROCE | 13.33% | ||
| ROIC | 10.39% | ||
| ROICexc | 10.54% | ||
| ROICexgc | 95.29% | ||
| OM | 17.24% | ||
| PM (TTM) | 11.78% | ||
| GM | 34.6% | ||
| FCFM | 11.77% |
ROA(3y)7.71%
ROA(5y)7.84%
ROE(3y)25.45%
ROE(5y)25.35%
ROIC(3y)10.86%
ROIC(5y)11.02%
ROICexc(3y)11.08%
ROICexc(5y)11.42%
ROICexgc(3y)120.36%
ROICexgc(5y)166.96%
ROCE(3y)13.69%
ROCE(5y)13.98%
ROICexcg growth 3Y-15.78%
ROICexcg growth 5Y-18.87%
ROICexc growth 3Y-3.26%
ROICexc growth 5Y-1.02%
OM growth 3Y-0.78%
OM growth 5Y0.01%
PM growth 3Y-6.16%
PM growth 5Y-0.98%
GM growth 3Y0.86%
GM growth 5Y-0.37%
F-Score5
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.45 | ||
| Debt/FCF | 6.49 | ||
| Debt/EBITDA | 3.42 | ||
| Cap/Depr | 116.01% | ||
| Cap/Sales | 3.21% | ||
| Interest Coverage | 7.08 | ||
| Cash Conversion | 74.85% | ||
| Profit Quality | 99.9% | ||
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.43 | ||
| Altman-Z | 2.44 |
F-Score5
WACC6.95%
ROIC/WACC1.5
Cap/Depr(3y)127.4%
Cap/Depr(5y)114.04%
Cap/Sales(3y)3.51%
Cap/Sales(5y)3.29%
Profit Quality(3y)93.9%
Profit Quality(5y)97.6%
High Growth Momentum
Growth
EPS 1Y (TTM)-6.86%
EPS 3Y2.23%
EPS 5Y3.12%
EPS Q2Q%-26.73%
EPS Next Y-12.32%
EPS Next 2Y-4.48%
EPS Next 3Y-0.8%
EPS Next 5Y9.53%
Revenue 1Y (TTM)-1.87%
Revenue growth 3Y0.86%
Revenue growth 5Y2.03%
Sales Q2Q%-3.35%
Revenue Next Year-4.09%
Revenue Next 2Y-2.25%
Revenue Next 3Y-0.73%
Revenue Next 5Y3.61%
EBIT growth 1Y-8.02%
EBIT growth 3Y0.07%
EBIT growth 5Y2.04%
EBIT Next Year12.88%
EBIT Next 3Y6.02%
EBIT Next 5Y8.91%
FCF growth 1Y-9.32%
FCF growth 3Y-5.85%
FCF growth 5Y-6.54%
OCF growth 1Y-11.64%
OCF growth 3Y-4.17%
OCF growth 5Y-4.51%