Summary

I investigate whether General Mills is worth a buy at this time.  In the end I conclude it would not be the worst time to buy shares.  The company is trading at historical valuations levels of about 19x earnings.  I’m hesitant to expect market outperformance at this point, sales are currently declining.  Sales would need to shore up before we can expect stellar earnings growth.  In addition, the company has $4B in debt coming due in the next few years that will need to be reissued.  Based on cash flow after dividend payments, full debt repayment seems unlikely.

General Mills logo

Buying now secures about a 3.3% dividend yield, which is much better than what the market is currently providing, just expect some muted dividend growth until sales pick back up.  The best time would have been to buy shares a few years ago when the company had been long term out of favor, trading around a multiple of 15 before picking up the past few years.  2016 saw large scale overvaluation which is visible on any stock chart.  Again, with shares at a 52 week low, they look reasonable but hardly a steal.

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