General Mills, Inc. (GIS), Kellogg Company (K): 3 Compelling Reasons to Buy This Food Company

Investors delight

General Mills also has a history of paying dividends since 1990, which have been hiked from $0.04 to $0.38 per share. Yet its payout ratio is 46.2%, hinting towards sustainable payouts in the future. At the current price, shares of General Mills, Inc. (NYSE:GIS) yield 3.08% which is stupendous for a company with an impressive growth record.

It also has a share repurchase program underway. In FY12, the company repurchased 19 million of its shares for nearly $745 million and is aiming to reduce its outstanding shares by around 2%. This accounts to a pending share repurchase of nearly $630 million, which should boost its dividend yield to 3.17%.

Wrap Up

Bad economy or good economy, consumer foods companies make money most of the time. With inorganic expansions and a solid balance sheet, General Mills, Inc. (NYSE:GIS) has hedged out the market risks, which looks great for its dividend sustainability and future share buybacks. I believe that General Mills is good enough make it into almost any income growth portfolio, and deserves a buy rating.

The article 3 Compelling Reasons to Buy This Food Company originally appeared on Fool.com and is written by Piyush Arora.

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