GIS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 87 industry peers in the Food Products industry. GIS has an excellent profitability rating, but there are concerns on its financial health. GIS is valued correctly, but it does not seem to be growing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
In the past 5 years GIS has always been profitable.
Each year in the past 5 years GIS had a positive operating cash flow.

1.2 Ratios

GIS has a better Return On Assets (7.79%) than 89.66% of its industry peers.
With an excellent Return On Equity value of 27.23%, GIS belongs to the best of the industry, outperforming 96.55% of the companies in the same industry.
The Return On Invested Capital of GIS (9.65%) is better than 87.36% of its industry peers.
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

GIS has a better Profit Margin (13.51%) than 96.55% of its industry peers.
GIS's Profit Margin has been stable in the last couple of years.
GIS has a better Operating Margin (15.95%) than 93.10% of its industry peers.
GIS's Operating Margin has been stable in the last couple of years.
GIS has a Gross Margin of 33.83%. This is in the better half of the industry: GIS outperforms 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

GIS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for GIS has been reduced compared to 1 year ago.
Compared to 5 years ago, GIS has less shares outstanding
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.
GIS's Altman-Z score of 2.37 is in line compared to the rest of the industry. GIS outperforms 55.17% of its industry peers.
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.
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.
Looking at the Debt to Equity ratio, with a value of 1.31, GIS is doing worse than 79.31% of the companies in the same industry.

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

ROIC/WACC1.46

WACC6.61%

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.
Looking at the Current ratio, with a value of 0.66, GIS is doing worse than 87.36% of the companies in the same industry.
GIS has a Quick 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.
With a Quick ratio value of 0.39, GIS is not doing good in the industry: 81.61% of the companies in the same industry are doing better.

		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

Based on estimates for the next years, GIS will show a small growth in Earnings Per Share. The EPS will grow by 0.16% on average per year.
GIS is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.06% yearly.

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.
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

Based on the Price/Earnings ratio of 12.04, the valuation of GIS can be described as correct.
Based on the Price/Earnings ratio, GIS is valued a bit cheaper than 78.16% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.21. GIS is valued rather cheaply when compared to this.
GIS is valuated reasonably with a Price/Forward Earnings ratio of 11.81.
Based on the Price/Forward Earnings ratio, GIS is valued cheaper than 81.61% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, GIS is valued rather cheaply.

		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.
Based on the Price/Free Cash Flow ratio, GIS is valued a bit cheaper than 75.86% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	13.33
EV/EBITDA	10.39

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-5.35%

EPS Next 3Y-1.68%

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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 1.81, 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 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

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-5.35%

EPS Next 3Y-1.68%

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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 -11.89% in the next year.