GENERAL MILLS INC (GIS) Stock Analysis
GENERAL MILLS INC (GIS) Stock Analysis
Overall Grade: F (Concerning)
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GENERAL MILLS INC faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | 12.5% | Solid returns |
| FCF Margin | 9.5% | Healthy cash flow |
| Debt/Equity | 1.3x | Moderate leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is GENERAL MILLS INC's Profitability and ROIC?
GENERAL MILLS INC's return on invested capital of 12.5% is around industry norms. Gross margin of 33.8% with operating margin at 20.5% reflects the company's moderate market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 12.5% | Good | Adequate returns |
| Return on Equity (ROE) | 27.3% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 33.8% | Good | Competitive pricing environment |
| Operating Margin | 20.5% | Excellent | Efficient operations |
How Strong is GENERAL MILLS INC's Cash Flow Quality?
GENERAL MILLS INC generated $1.8B in free cash flow over the trailing twelve months, representing a 9.5% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 9.5% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $1.8B | Good | Positive cash generation |
| OCF/Net Income | 0.9x | Good | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is GENERAL MILLS INC's Financial Health?
GENERAL MILLS INC's debt-to-equity ratio of 1.3x indicates moderate leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 1.3x | Adequate | Moderate leverage |
| Net Cash Position | $-11.5B | Warning | Net debt position |
Is GENERAL MILLS INC Stock Overvalued or Undervalued?
GENERAL MILLS INC trades at a P/E of 10.3x, representing a premium to the sector median of N/A. Free cash flow yield of 6.8% offers attractive cash returns.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | 10.3x | Adequate | Reasonable valuation |
| EV/Sales | 2.8x | Good | Attractive revenue multiple |
| FCF Yield | 6.8% | Good | Attractive cash return |
| Dividend Yield | 5.0% | Good | Meaningful income |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 12.5% | Top 50% | 1.7x above |
| Free Cash Flow Margin | 9.5% | Top 50% | 1.4x above |
| Gross Margin | 33.8% | Top 50% | 1.0x above |
| Operating Margin | 20.5% | Top 25% | 2.6x above |
| Return on Equity (ROE) | 27.3% | Top 25% | 4.2x above |
| P/E Ratio | 10.3x | N/A | - |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: 12.5% (Good - Top 50% of sector (median: 7.3%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 9.5% (Adequate - Top 50% of sector (median: 6.9%))
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 33.8% (Good - Top 50% of sector (median: 33.3%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 130.7% (Adequate)
P/E Ratio (Price-to-Earnings)
Stock price divided by earnings per share. Lower P/E may indicate undervaluation, while higher P/E suggests growth expectations.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 15x | Attractively valued, potential opportunity |
| Good | 15x - 25x | Fair value for quality company |
| Adequate | 25x - 35x | Growth premium, justify with earnings growth |
| Warning | 35x - 50x | High expectations priced in |
| Red flag | > 50x or negative | Speculative valuation or losses |
Current: 10.3x (Adequate)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 6.8% (Good)
Frequently Asked Questions
Q: What is GENERAL MILLS INC's Return on Invested Capital (ROIC)?
GENERAL MILLS INC (GIS) has a trailing twelve-month Return on Invested Capital (ROIC) of 12.5%. This compares above the sector median of 7.3%. An ROIC between 12-20% indicates solid capital allocation and sustainable competitive position.
Q: What is GENERAL MILLS INC's Free Cash Flow Margin?
GENERAL MILLS INC (GIS) has a free cash flow margin of 9.5%, generating $1.8 billion in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is GENERAL MILLS INC stock overvalued or undervalued?
GENERAL MILLS INC (GIS) trades at a P/E ratio of 10.3x, which is above the sector median of N/A. The EV/Sales multiple is 2.8x. Free cash flow yield is 6.8%, which represents an attractive cash return to investors.
Q: Does GENERAL MILLS INC pay a dividend?
GENERAL MILLS INC (GIS) currently pays a dividend yield of 5.0%. Including share buybacks, the total shareholder yield is 9.2%. A yield above 4% is attractive for income investors, though sustainability should be verified through payout ratio analysis.
Q: How much debt does GENERAL MILLS INC have?
GENERAL MILLS INC (GIS) has a debt-to-equity ratio of 1.3x with total debt of $12.2 billion. Net debt position is $11.5 billion.
Q: What is GENERAL MILLS INC's revenue and earnings growth?
GENERAL MILLS INC (GIS) declined revenue by 5.7% year-over-year. Earnings per share increased by 1.1% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: Is GENERAL MILLS INC buying back stock?
GENERAL MILLS INC (GIS) repurchased $1.1 billion of stock over the trailing twelve months. This represents a buyback yield of 4.2%.
Q: How does GENERAL MILLS INC compare to competitors in Consumer Staples?
Compared to other companies in Consumer Staples, GENERAL MILLS INC (GIS) shows: ROIC of 12.5% is above the sector median of 7.3% (Top 34%). FCF margin of 9.5% exceeds the sector median of 6.9% (Top 34% of sector). Gross margin at 33.8% is 0.5 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Staples companies with available SEC filings.
Q: What warning signs should I watch for with GENERAL MILLS INC?
GENERAL MILLS INC (GIS) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-12-17. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.