The Kraft Heinz Company (NASDAQ:KHC) and General Mills, Inc. (NYSE:GIS) are both familiar names in the consumer staples sector, and both are offering yields above 6%. On the surface, the two stocks look like similar income plays. The dividend numbers tell a more complicated story. Their cash flows, payout histories, and prospects for future increases are quite different.

Kraft Heinz pays $0.40 per share each quarter, or $1.60 annually. That payout has not changed since 2019, when the company cut the quarterly dividend from $0.625 to $0.40. There has been no increase since then. General Mills pays $0.61 per share each quarter, or $2.44 annually. Its dividend history is much stronger. General Mills, Inc. (NYSE:GIS) and its predecessor companies have paid dividends without interruption for 127 years. The company raised the quarterly payout from $0.60 to $0.61 in 2025 and has kept it at that level through 2026.

General Mills clearly comes out ahead on dividend history. Kraft Heinz provides a similar level of income today, but its 2019 cut remains an important part of the story.

Dividend Yield

At recent prices, there is very little separating the two yields. The Kraft Heinz Company (NASDAQ:KHC) traded around $24.75 on August 17, putting its yield at about 6.5% based on the $1.60 annual dividend. General Mills, Inc. (NYSE:GIS) closed at $37.98, giving it a yield of about 6.4%.

For someone looking mainly at current income, the difference is small. Either stock offers roughly the same yield. The more important question is why the yields are this high in the first place. Neither company has meaningfully raised its dividend in recent years, so much of the yield comes from weaker share prices. Kraft Heinz has been under pressure as investors have questioned its growth outlook, while General Mills has also traded close to its 52-week low. The yields are attractive, but they do not point to strong dividend growth.

Kraft Heinz: What’s Working for the Dividend

The Kraft Heinz Company (NASDAQ:KHC)’s biggest strength is its cash generation. Kraft Heinz generated $4.5 billion in operating cash flow in 2025, up 6.6% from the previous year. Free cash flow reached $3.7 billion, a 15.9% increase. The company also returned $2.3 billion to shareholders during the year. That puts the roughly $1.6 billion annual dividend in a comfortable position. Kraft Heinz still has cash left after paying the dividend for debt reduction, investment, and share repurchases.

Kraft Heinz has continued to declare the $0.40 quarterly dividend in 2026, including its August 2026 declaration. For income investors, strong cash generation is a meaningful positive. The dividend does not consume most of the company’s free cash flow.

Kraft Heinz: What’s Not Working

The bigger issue is the underlying business. It is not giving investors much reason to expect the dividend to grow. Full-year 2025 sales declined 3.5%, organic sales fell 3.4%, and adjusted operating income dropped 11.5%. The Kraft Heinz Company (NASDAQ:KHC) also recorded a $9.3 billion non-cash impairment charge, pushing reported operating results to a $4.7 billion loss.

The pressure continued in 2026. Kraft Heinz reported another major impairment charge of about $7.4 billion, while the quarterly dividend remained at $0.40. The impairment charges are non-cash, so they do not directly take money away from the dividend. What matters more is what they say about the value and future earning power of some of Kraft Heinz’s brands. The unchanged $0.40 payout also says a lot about the stock. Kraft Heinz is primarily a high-current-yield play today, rather than a dividend-growth investment.

General Mills: What’s Working for the Dividend

General Mills, Inc. (NYSE:GIS) has the stronger dividend track record. The company has maintained an uninterrupted dividend record spanning 127 years. Management also continues to treat the dividend as an important part of its capital-allocation plans and has said it remains committed to the current quarterly rate in the near term.

General Mills still generates a substantial amount of cash, but the trend has weakened. In fiscal 2026, it produced $2.17 billion in operating cash flow and $1.63 billion in free cash flow after $540 million of capital spending. It paid $1.32 billion in dividends during the year. The dividend was still covered by free cash flow, but the cushion was much thinner than Kraft Heinz’s. Dividends consumed roughly 81% of General Mills’ free cash flow in fiscal 2026.

General Mills, Inc. (NYSE:GIS) is also targeting $3 billion in cumulative cost savings through fiscal 2030, including at least $750 million in fiscal 2027. If those savings come through, they could give margins, earnings, and cash flow some room to recover.

General Mills: What’s Not Working

The main concern is that both cash flow and earnings have moved in the wrong direction. Operating cash flow fell from $2.9 billion in fiscal 2025 to $2.2 billion in fiscal 2026. Free cash flow fell from roughly $2.29 billion to $1.63 billion over the same period, while dividend payments remained at $1.32 billion.

That leaves less room for error if the business weakens further. General Mills, Inc. (NYSE:GIS) also recorded a $3 billion restructuring, transformation and impairment expense in fiscal 2026. Large non-cash charges pushed reported earnings into a loss, while adjusted EPS fell 16% on a constant-currency basis. The company is also dealing with weak organic sales and a difficult consumer environment. Management expects category growth in fiscal 2027 to remain below its historical long-term rate.

For now, the dividend looks established. The weaker cash flow, though, makes a meaningful increase less likely until the business stabilizes.

The Cash Flow Difference Matters

The cash-flow numbers make the difference between the two much clearer. The Kraft Heinz Company (NASDAQ:KHC) generated $3.7 billion in free cash flow in 2025 against roughly $1.6 billion in annual dividends. That gives its payout a wide cushion. General Mills generated $1.63 billion in free cash flow in fiscal 2026 while paying $1.32 billion in dividends. In simple terms, Kraft Heinz currently has the stronger free-cash-flow coverage, while General Mills has the stronger dividend history.

That distinction matters. A 127-year record shows that General Mills, Inc. (NYSE:GIS) has protected its dividend through many different business cycles. But today’s cash generation is what pays today’s dividend. Kraft Heinz has the advantage on current coverage. General Mills has the advantage on dividend history.

What’s the Better Dividend?

For investors focused on current income and cash-flow coverage, The Kraft Heinz Company (NASDAQ:KHC) has the stronger case. The stock yields around 6.5%, pays $1.60 a year per share, and generated $3.7 billion in free cash flow in 2025. The dividend is comfortably covered by that cash flow.

The trade-off is growth. Kraft Heinz has not raised its quarterly payout since the 2019 cut to $0.40. For investors who want an income stream that grows over time, that is a meaningful drawback.

General Mills, Inc. (NYSE:GIS) offers a similar yield and a much longer record of protecting its dividend. A 127-year history is difficult to match, and management has reaffirmed its commitment to the current payout. The concern is that dividends consumed about 81% of free cash flow in fiscal 2026. That leaves less room if the business stays under pressure.

Conclusion

The Kraft Heinz Company (NASDAQ:KHC) and General Mills, Inc. (NYSE:GIS) both offer unusually high yields for consumer staples companies. Neither looks like a straightforward dividend-growth stock right now. Kraft Heinz has the better current dividend coverage, while General Mills has the stronger dividend history. Kraft Heinz’s $3.7 billion of 2025 free cash flow gives its $1.6 billion annual dividend a comfortable cushion. That is the strongest part of the dividend case. The downside is the lack of growth, continued pressure on sales and earnings, and another large impairment charge.

General Mills remains the more established income name. Its 127-year uninterrupted dividend record and management’s commitment to the payout are important positives. The problem is the narrower cash-flow cushion: $1.63 billion of free cash flow against $1.32 billion in dividends in fiscal 2026.

For an investor choosing between the two, Kraft Heinz has the edge on cash-flow coverage and current income, while General Mills has the edge on dividend reliability and history. The choice comes down to what matters more: stronger coverage today or a longer record of protecting the payout.

Neither stock currently offers the full combination of a high yield, strong dividend growth, and improving fundamentals. Both companies need to strengthen their underlying businesses before the dividend stories can become more compelling. Until then, these stocks offer more in the way of current income than dividend growth.

READ NEXT: Is Tractor Supply Company (TSCO) an Underrated Dividend Growth Opportunity? and BioMarin Pharmaceutical (BMRN)’s Alesta Deal Adds New Growth Potential in Rare Diseases

Disclosure: None. This article is originally published at Insider Monkey.