Food Company Dividend Yields: 3%-Plus and Cereal Beats Meat and Macaroni on Profit Margin
General Mills (GIS) and ConAgra (CAG) are expected to report similarly flat earnings for the fiscal third quarter, ended Feb. 29, this week, and standing back to back there's little to differentiate these two food makers - at first glance.
And but for Kraft, which is in the midst of breaking in two, they all have more or less the same valuation.
But look closer andd the cereal makers, General Mills (Cheerios) and Kellogg (Special K), tend to outshine the meat and macaroni makers, ConAgra and Kraft. Over the past 10 years, the former two have had a more impressive stock performance.
There are no guarantees such outperformance will continue, but in a slow-growth business, fat margins are what you want.