We recently compiled a list of the 10 Best Dividend Stocks of All Time. In this article, we are going to take a look at where General Mills, Inc. (NYSE:GIS) stands against the other dividend stocks.

Dividend stocks aren’t a quick fix for investing; they offer lasting rewards over time. Unfortunately, many investors miss the boat on this and expect to strike it rich overnight. When that doesn’t pan out, they chase the latest stock market trends, ignoring the steady gains that dividend stocks can provide. This trend has been evident over the past year, with AI stocks taking the spotlight and leaving income stocks in the dust. However, there’s a silver lining: many tech companies have begun offering dividends this year, highlighting their long-term potential.

The current yields of these tech stocks might be small, which leads many income investors to overlook their impressive growth records. This is unfortunate because dividend growth can significantly boost both long-term income and capital gains. Analysts believe that dividend growth and sustainability are more crucial than just the yield. For instance, Microsoft’s roughly 864% return over a decade far outpaces the returns from non-tech stocks like AT&T and Chevron, despite their higher yields. The tech giant currently pays $0.75 per quarter and offers a dividend yield of 0.7%. However, you need to keep in mind that its quarterly dividend was $0.28 a decade ago and its dividend yield was 2.5%. Despite the nearly tripling its quarterly dividend, the stock’s yield went down to 0.7% and that was a great thing for its dividend investors.

Dividend stocks are often compared not just with high-yield stocks but also with those that don’t pay dividends to provide investors with a comprehensive view. According to data from Hartford Funds, from 1973 to 2023, dividend-paying companies offered an average annual return of 9.17%, while stocks without dividends only returned 4.27%. The report also noted that companies with stable dividends had an average return of 6.74%, which lagged behind the performance of companies that increased their dividends.

While regularly increasing dividends is challenging, maintaining consistent payouts year after year is also no easy feat for companies. Analysts warn against yield traps—stocks with high yields but unstable dividend policies. Brian Bollinger, president of Simply Safe Dividends, shared his views on dividend investing in a CNBC interview. He recommended focusing on top-quality companies, which often provide dividend yields of around 3% to 4%. These firms usually show steady growth in their dividend payments, boosting the annual income stream and helping to counteract inflation. He also pointed out that stocks with lower yields tend to be safer investments with more reliable payout structures.

In this article, we will take a look at some of the best dividend stocks of all time that have consistent records of paying dividends to shareholders.

Our Methodology:

For this article, we scanned the list of companies that have paid dividends to shareholders for at least 75 years. From that list, we picked companies with dividend yields of above 2%, as of July 23. We analyzed these companies through their balance sheets and overall financial health to determine their dividend stability. Additionally, we assessed the sentiment of hedge funds for each stock using Insider Monkey’s Q1 2024 database. The stocks are arranged in ascending order based on the number of hedge funds that hold stakes in these companies. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

General Mills, Inc. (NYSE:GIS)

Number of Hedge Fund Holders: 39

Dividend Yield as of July 23: 3.75%

General Mills, Inc. (NYSE:GIS) is an American multinational food processing company that also markets processed consumer food through retail stores. The Consumer Price Index (CPI) report for June showed a 3.3% YoY increase in the core rate, slightly below the 3.5% increase economists had predicted and down from the 3.4% rise in May. The food category, which is closely monitored, saw a 2.2% increase YoY in June. Within this category, food away from home rose by 4.1%, while food at home increased by just 1.1%. Although the inflation rate for food at home has been below the Federal Reserve’s target of 2% for eight consecutive months, food prices overall remain high compared to two or three years ago. With inflation on the rise, food companies have had to increase their prices.

General Mills, Inc. (NYSE:GIS) is handling the situation more effectively than its peers. In its FY24 earnings, the company announced that it had achieved better volume performance in the second half of the year and generated top-tier cost savings through Holistic Margin Management (HMM). This enabled it to safeguard its brand investments while meeting its profit and cash flow targets. Looking ahead to fiscal 2025, the company’s primary focus is to boost organic net sales growth, particularly in volume, by delivering exceptional experiences across its portfolio of leading brands. The gross margin also rose by 140 basis points to 35.8% of net sales, thanks to HMM cost savings, favorable mark-to-market effects, and reduced other supply chain expenses.

General Mills, Inc. (NYSE:GIS) also reported a strong cash position with an operating cash flow of $3.3 billion in FY24, up from $2.8 billion in the prior-year period. During the year, the company paid $1.4 billion in dividends, showing its commitment to shareholder return. The company has paid dividends without interruption for 125 years, which makes it one of the best dividend stocks of all time. On June 26, General Mills, Inc. (NYSE:GIS) declared a 1.7% hike in its quarterly dividend to $0.60 per share. This was the company’s third consecutive year of dividend growth after the pandemic. The stock offers a dividend yield of 3.75%, as of July 23.

According to Insider Monkey’s database of Q1 2024, 39 hedge funds held stakes in General Mills, Inc. (NYSE:GIS), compared with 40 in the previous quarter. These stakes have a total value of nearly $852 million. With over 2.6 million shares, Two Sigma Advisors was the company’s leading stakeholder in Q1.

Overall GIS ranks 4th on our list of the best dividend stocks to buy. You can visit 10 Best Dividend Stocks of All Time to see the other dividend stocks that are on hedge funds’ radar. While we acknowledge the potential of GIS as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued dividend stock that is more promising than GIS but that trades at less than 7 times its earnings and yields nearly 10%, check out our report about the dirt cheap dividend stock.

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