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.

Both have roughly the same healthy dividend yield. And that yield is roughly equal to two other food companies, Kraft (KFT) and Kellogg (K).

General Mills Dividend Yield Chart

General Mills Dividend Yield Chart by YCharts

And but for Kraft, which is in the midst of breaking in two, they all have more or less the same valuation.

General Mills PE Ratio Chart

General Mills PE Ratio Chart by YCharts

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.

General Mills Stock Chart

General Mills Stock Chart by YCharts

Why? Perhaps it's because General Mills’ profit margin and Kellogg’s profit margin are generally wider than the other food makers.

General Mills Profit Margin Chart

General Mills Profit Margin Chart by YCharts

There are no guarantees such outperformance will continue, but in a slow-growth business, fat margins are what you want.

Michael McHugh is an editor for the YCharts Pro Investor Service which includes professional stock charts, stock ratings, stock screener and portfolio strategies.



Please note that this feature is only available as an add-on to YCharts subscriptions.

Please note that this feature requires full activation of your account and is not permitted during the free trial period.

Start My Free Trial {{}} No credit card required.

Already a subscriber? Sign in.