General Mills
Inc. processes and markets such well known products as Cheerios, Wheaties,
Total, Chex, Betty Crocker, Bisquick, Hamburger Helper, Yoplait and
Progresso. The company has grown profits
and dividends at a 9-10% pace over the last ten years earning a 20%+ return on
equity. This performance should continue
as a result of:
(1)
an outstanding portfolio of fast growing brands
(2) a steady
pipeline of new products which enhance sales and take market share,
(3) an
aggressive cost cutting program,
(4) expansion
into emerging markets which should account for 70% of food growth through 2012,
(5)
acquisitions,
(6) management
is committed to enhancing shareholder value via increasing dividends and share
buy backs.
Negatives:
(1) GIS international exposure increases the risk of
loss from currency fluctuation,
(2) during
periods of economic malaise, consumers tend to trade down to generic brands,
(3) rising
commodity costs,
(4) softness in
its yogurt and cereal businesses.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 2.4 8 36 NA
Debt/ EPS Down Net Value Line
Equity ROE
Since 2004 Margin Rating
Ind Ave 37 13 NA 7
NA
Chart
Note:
GIS stock made great progress off its March 2009 low, surpassing the downtrend of
its September 2008 high (straight red line) and the November 2008 trading high
(green line). Long term, GIS is in an
uptrend (blue lines); intermediate term, it is in an uptrend (purple
lines). The wiggly red line is the 50 day
moving average. The Dividend Growth
Portfolio owns a 50% position in GIS, having Sold Half in early 2013. The upper boundary of its Buy Value Range is
$31; the lower boundary of its Self Half Range in $44.
8/14
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