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 90 industry peers in the Food Products industry. GIS scores excellent on profitability, but 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. GIS also has an excellent dividend rating.
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.
GIS had positive earnings in each of the past 5 years.
GIS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GIS has a better Return On Assets (7.82%) than 78.89% of its industry peers.
GIS has a Return On Equity of 27.62%. This is amongst the best in the industry. GIS outperforms 94.44% of its industry peers.
GIS has a Return On Invested Capital of 11.48%. This is amongst the best in the industry. GIS outperforms 84.44% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GIS is above the industry average of 8.63%.
The last Return On Invested Capital (11.48%) for GIS is above the 3 year average (11.19%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.82% | ||
| ROE | 27.62% | ||
| ROIC | 11.48% |
ROA(3y)8.3%
ROA(5y)7.86%
ROE(3y)25.69%
ROE(5y)25.77%
ROIC(3y)11.19%
ROIC(5y)11.05%
1.3 Margins
Looking at the Profit Margin, with a value of 13.03%, GIS belongs to the top of the industry, outperforming 93.33% of the companies in the same industry.
GIS's Profit Margin has improved in the last couple of years.
The Operating Margin of GIS (18.33%) is better than 94.44% of its industry peers.
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 (35.38%) is better than 81.11% of its industry peers.
GIS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.33% | ||
| PM (TTM) | 13.03% | ||
| GM | 35.38% |
OM growth 3Y-0.35%
OM growth 5Y1.11%
PM growth 3Y-0.88%
PM growth 5Y3.88%
GM growth 3Y-0.55%
GM growth 5Y0.17%
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.
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.
GIS has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.54 indicates that GIS is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.54, GIS perfoms like the industry average, outperforming 53.33% of the companies in the same industry.
GIS has a debt to FCF ratio of 5.73. This is a neutral value as GIS would need 5.73 years to pay back of all of its debts.
The Debt to FCF ratio of GIS (5.73) is better than 72.22% of its industry peers.
GIS has a Debt/Equity ratio of 1.32. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.32, GIS is doing worse than 78.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 5.73 | ||
| Altman-Z | 2.54 |
ROIC/WACC1.56
WACC7.36%
2.3 Liquidity
A Current Ratio of 0.67 indicates that GIS may have some problems paying its short term obligations.
With a Current ratio value of 0.67, GIS is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
GIS has a Quick Ratio of 0.67. 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 Quick ratio of 0.44 is on the low side compared to the rest of the industry. GIS is outperformed by 75.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
The earnings per share for GIS have decreased by -3.24% in the last year.
GIS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.02% yearly.
Looking at the last year, GIS shows a decrease in Revenue. The Revenue has decreased by -2.62% in the last year.
The Revenue has been growing slightly by 3.32% on average over the past years.
EPS 1Y (TTM)-3.24%
EPS 3Y6.05%
EPS 5Y7.02%
EPS Q2Q%-14.53%
Revenue 1Y (TTM)-2.62%
Revenue growth 3Y3.09%
Revenue growth 5Y3.32%
Sales Q2Q%-5.04%
3.2 Future
The Earnings Per Share is expected to grow by 1.39% on average over the next years.
The Revenue is expected to decrease by -0.77% on average over the next years.
EPS Next Y-6.3%
EPS Next 2Y-5.15%
EPS Next 3Y-1.94%
EPS Next 5Y1.39%
Revenue Next Year-2.39%
Revenue Next 2Y-2.08%
Revenue Next 3Y-1.46%
Revenue Next 5Y-0.77%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 11.92 indicates a reasonable valuation of GIS.
Based on the Price/Earnings ratio, GIS is valued a bit cheaper than 76.67% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.82, GIS is valued rather cheaply.
GIS is valuated correctly with a Price/Forward Earnings ratio of 13.13.
GIS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GIS is cheaper than 75.56% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. GIS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 13.13 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GIS is on the same level as its industry peers.
75.56% 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 | 11.8 | ||
| EV/EBITDA | 10.25 |
4.3 Compensation for Growth
GIS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.7
EPS Next 2Y-5.15%
EPS Next 3Y-1.94%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.41%, GIS is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.59, GIS pays a better dividend. On top of this GIS pays more dividend than 85.56% 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 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.41% |
5.2 History
The dividend of GIS has a limited annual growth rate of 3.77%.
GIS has paid a dividend for at least 10 years, which is a reliable track record.
GIS has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.77%
Div Incr Years4
Div Non Decr Years33
5.3 Sustainability
GIS pays out 52.52% of its income as dividend. 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.
DP52.52%
EPS Next 2Y-5.15%
EPS Next 3Y-1.94%
53.38
+0.04 (+0.07%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners83.24%
Inst Owner Change2.03%
Ins Owners0.26%
Ins Owner Change0.08%
Market Cap29.23B
Analysts65.93
Price Target63.45 (18.86%)
Short Float %5.21%
Short Ratio4.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.41% |
Yearly Dividend2.38
Dividend Growth(5Y)3.77%
DP52.52%
Div Incr Years4
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.59%
Min EPS beat(2)3.36%
Max EPS beat(2)13.83%
EPS beat(4)4
Avg EPS beat(4)4.49%
Min EPS beat(4)0.06%
Max EPS beat(4)13.83%
EPS beat(8)7
Avg EPS beat(8)4.96%
EPS beat(12)11
Avg EPS beat(12)5.43%
EPS beat(16)14
Avg EPS beat(16)5.14%
Revenue beat(2)1
Avg Revenue beat(2)-1.22%
Min Revenue beat(2)-3.37%
Max Revenue beat(2)0.93%
Revenue beat(4)1
Avg Revenue beat(4)-1.57%
Min Revenue beat(4)-3.84%
Max Revenue beat(4)0.93%
Revenue beat(8)2
Avg Revenue beat(8)-1.74%
Revenue beat(12)4
Avg Revenue beat(12)-1.04%
Revenue beat(16)7
Avg Revenue beat(16)-0.22%
PT rev (1m)-1.02%
PT rev (3m)-11.43%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)-23.38%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.14%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)-4.25%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-1.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 13.13 | ||
| P/S | 1.49 | ||
| P/FCF | 11.8 | ||
| P/OCF | 9.22 | ||
| P/B | 3.16 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.25 |
EPS(TTM)4.48
EY8.39%
EPS(NY)4.07
Fwd EY7.62%
FCF(TTM)4.52
FCFY8.47%
OCF(TTM)5.79
OCFY10.85%
SpS35.87
BVpS16.92
TBVpS-24.31
PEG (NY)N/A
PEG (5Y)1.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.82% | ||
| ROE | 27.62% | ||
| ROCE | 14.5% | ||
| ROIC | 11.48% | ||
| ROICexc | 11.72% | ||
| ROICexgc | 135.48% | ||
| OM | 18.33% | ||
| PM (TTM) | 13.03% | ||
| GM | 35.38% | ||
| FCFM | 12.61% |
ROA(3y)8.3%
ROA(5y)7.86%
ROE(3y)25.69%
ROE(5y)25.77%
ROIC(3y)11.19%
ROIC(5y)11.05%
ROICexc(3y)11.5%
ROICexc(5y)11.59%
ROICexgc(3y)142.43%
ROICexgc(5y)203.07%
ROCE(3y)14.09%
ROCE(5y)13.92%
ROICexcg growth 3Y-26.03%
ROICexcg growth 5Y9.28%
ROICexc growth 3Y-0.15%
ROICexc growth 5Y4.48%
OM growth 3Y-0.35%
OM growth 5Y1.11%
PM growth 3Y-0.88%
PM growth 5Y3.88%
GM growth 3Y-0.55%
GM growth 5Y0.17%
F-Score6
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 5.73 | ||
| Debt/EBITDA | 2.96 | ||
| Cap/Depr | 127.52% | ||
| Cap/Sales | 3.53% | ||
| Interest Coverage | 7.63 | ||
| Cash Conversion | 76.5% | ||
| Profit Quality | 96.8% | ||
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.44 | ||
| Altman-Z | 2.54 |
F-Score6
WACC7.36%
ROIC/WACC1.56
Cap/Depr(3y)121.97%
Cap/Depr(5y)106.34%
Cap/Sales(3y)3.44%
Cap/Sales(5y)3.17%
Profit Quality(3y)94.44%
Profit Quality(5y)107.11%
High Growth Momentum
Growth
EPS 1Y (TTM)-3.24%
EPS 3Y6.05%
EPS 5Y7.02%
EPS Q2Q%-14.53%
EPS Next Y-6.3%
EPS Next 2Y-5.15%
EPS Next 3Y-1.94%
EPS Next 5Y1.39%
Revenue 1Y (TTM)-2.62%
Revenue growth 3Y3.09%
Revenue growth 5Y3.32%
Sales Q2Q%-5.04%
Revenue Next Year-2.39%
Revenue Next 2Y-2.08%
Revenue Next 3Y-1.46%
Revenue Next 5Y-0.77%
EBIT growth 1Y-1.75%
EBIT growth 3Y2.72%
EBIT growth 5Y4.47%
EBIT Next Year8.65%
EBIT Next 3Y2.53%
EBIT Next 5Y2.37%
FCF growth 1Y-2.71%
FCF growth 3Y1.02%
FCF growth 5Y2.19%
OCF growth 1Y1.78%
OCF growth 3Y3.45%
OCF growth 5Y3.31%