WhiteWave Foods Co (WWAV), General Mills, Inc. (GIS): Buying a Part of This Food Company May Be Better Than the Whole

In contrast, General Mills, Inc. (NYSE:GIS)’ historic volatility is just 12.3%, meaning that if its average price in a month is $50, it would only fluctuate between $46.93 and $53.08. That is, the exact timing of your entry point is not nearly as important to your long-term success in the investment. Additionally, General Mills, Inc. (NYSE:GIS) actually trades at a lower valuation that Dean, at 18.6 times TTM earnings versus 22.8 for Dean Foods Co (NYSE:DF). General Mills, Inc. (NYSE:GIS) also rewards their shareholders with a nice 3% dividend yield, while Dean doesn’t pay anything.

So, what to do?

For those who don’t have the stomach for 50% fluctuations in their portfolio on a regular basis, you are better off with one of the larger, more stable food companies such as General Mills, Inc. (NYSE:GIS). If, on the other hand, you can stomach a little more risk, I still don’t think Dean is the way to go.

The best play here, if you have the risk tolerance, would be to buy shares of WhiteWave Foods Co (NYSE:WWAV), which can reward investors in two ways. First, the nature of WhiteWave’s products should mean growth in the years ahead, especially if Americans really begin to embrace healthier eating choices. Also, as a potential takeover target, WhiteWave Foods Co (NYSE:WWAV) would almost certainly be worth more to one of the giants trying to buy into a trend than the $17 or so that shares are currently trading for.

Either way, WhiteWave should reward its investors much better than an investment in Dean Foods before the spin-off.

The article Buying a Part of This Food Company May Be Better Than the Whole originally appeared on Fool.com is written by Matthew Frankel.

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