GIS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 87 industry peers in the Food Products industry. While GIS belongs to the best of the industry regarding profitability, there are concerns on its financial health. GIS has a valuation in line with the averages, but on the other hand it scores bad on growth.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

GIS had positive earnings in the past year.
GIS had a positive operating cash flow in the past year.
In the past 5 years GIS has always been profitable.
In the past 5 years GIS always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 7.79%, GIS belongs to the top of the industry, outperforming 89.66% of the companies in the same industry.
The Return On Equity of GIS (27.23%) is better 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

With an excellent Profit Margin value of 13.51%, GIS belongs to the best of the industry, outperforming 96.55% of the companies in the same industry.
In the last couple of years the Profit Margin of GIS has remained more or less at the same level.
Looking at the Operating Margin, with a value of 15.95%, GIS belongs to the top of the industry, outperforming 93.10% of the companies in the same industry.
In the last couple of years the Operating Margin of GIS has remained more or less at the same level.
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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), GIS is creating some value.
GIS has less shares outstanding than it did 1 year ago.
GIS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for GIS is higher compared to a year ago.

2.2 Solvency

GIS has an Altman-Z score of 2.37. 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.
With a Altman-Z score value of 2.37, GIS perfoms like the industry average, outperforming 55.17% of the companies in the same industry.
The Debt to FCF ratio of GIS is 7.70, which is on the high side as it means it would take GIS, 7.70 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.70, GIS is in the better half of the industry, outperforming 65.52% of the companies in the same industry.
A Debt/Equity ratio of 1.31 is on the high side and indicates that GIS has dependencies on debt financing.
GIS's Debt to Equity ratio of 1.31 is on the low side compared to the rest of the industry. GIS is outperformed by 79.31% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.31
Debt/FCF	7.7
Altman-Z	2.37

ROIC/WACC1.46

WACC6.61%

2.3 Liquidity

A Current Ratio of 0.66 indicates that GIS may have some problems paying its short term obligations.
GIS has a worse Current ratio (0.66) than 87.36% of its industry peers.
A Quick Ratio of 0.39 indicates that GIS may have some problems paying its short term obligations.
The Quick ratio of GIS (0.39) is worse than 81.61% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.66
Quick Ratio	0.39

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WACC

Debt/Equity

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Altman-Z score

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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.
GIS shows a decrease in Revenue. In the last year, the revenue decreased by -5.65%.
GIS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.03% yearly.

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

GIS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.16% yearly.
GIS is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.06% yearly.

EPS Next Y-12.33%

EPS Next 2Y-5.16%

EPS Next 3Y-1.49%

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

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 12.04, GIS is valued correctly.
GIS's Price/Earnings ratio is a bit cheaper when compared to the industry. GIS is cheaper than 79.31% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.21, GIS is valued rather cheaply.
A Price/Forward Earnings ratio of 11.77 indicates a reasonable valuation of GIS.
Based on the Price/Forward Earnings ratio, GIS is valued cheaply inside the industry as 81.61% of the companies are valued more expensively.
GIS is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	12.04
Fwd PE	11.77

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as GIS.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GIS indicates a somewhat cheap valuation: GIS is cheaper than 75.86% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	13.33
EV/EBITDA	10.38

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)3.86

EPS Next 2Y-5.16%

EPS Next 3Y-1.49%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 5.48%, GIS is a good candidate for dividend investing.
GIS's Dividend Yield is rather good when compared to the industry average which is at 2.29. GIS pays more dividend than 85.06% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.81, 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 been paying a dividend for at least 10 years, so it has a reliable track record.

Dividend Growth(5Y)4.25%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

52.10% 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 slower than its dividend. This means the dividend growth is not sustainable.

DP52.1%

EPS Next 2Y-5.16%

EPS Next 3Y-1.49%

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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 -12.33% in the next year.