Exxon Mobil Corporation (XOM), Sunoco Logistics Partners L.P. (SXL): Three Stocks for a Safe Retirement Portfolio

Is the dividend safe?

General Mills’ returns are fully backed by its business model and smart investment strategy. At present, General Mills is operating in three business segments which are generating solid earnings for the company. Recently, General Mills announced its third-quarter results with consolidated revenue growth of 7.5%. This solid growth lets it convert sales into earnings at high margins. Additionally, General Mills is also taking cost-cutting initiatives. which further enhance its margins.

The strong profitability of General Mills significantly impacts its cash flows. Its operating cash flow increases year after year. In the past 12 months, the operating cash flow grew by a massive 29% to $2.15 billion. General Mills is a well-organized and stable company working in the consumer defensive sector. It does not have to spend massive amounts for acquisitions.

The company makes investments in new markets and future growth opportunities only to gain or sustain its market share. Free cash flows are, therefore, enough to cover its dividends, which is a sign of their sustainability. At the end of the first nine months, General Mills’ free cash flows stand at $1.7 billion, while dividend payments accounted for only $652 million.

Final Notes

Sunoco Logistics Partners L.P. (NYSE:SXL) is an attractive investment for many reasons. Being organized as an master limited partnership, it gains favorable tax advantages. With an attractive dividend yield, it makes big distribution hikes with a history of continually increasing distribution. On the other hand, ExxonMobil is investing heavily to improve its reserves and production. Exxon is seeking to improve production by 23% by the end of 2017. Despite, its high capital expenditure, free cash flows cover its dividends payments. In the case of General Mills, it is a buy for the long haul.

The article Three Stocks for a Safe Retirement Portfolio originally appeared on Fool.com and is written by siraj sarwar.

siraj is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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