General Mills offers a defensive 6%+ yield and substantial cash generation, but the investment depends on reversing weak volumes, executing pet growth, and converting $3 billion of savings into durable EPS recovery.
Overview
General Mills is a global branded-food company organized across North America Retail, International, North America Pet, and North America Foodservice. Fiscal 2026 sales were $18.42 billion, with North America Retail contributing 57.4% and $2,189.0 million of segment profit. Its brands benefit from everyday demand, retailer distribution power, and scale, but Walmart and affiliates represent 22% of consolidated sales and private labels remain a persistent competitive threat. **The near-term financial trajectory is weak:** fiscal 2026 organic sales declined 2%, adjusted operating profit fell 16% in constant currency to $2.80 billion, adjusted EPS declined 16% to $3.55, and adjusted gross margin contracted to 33.5%. Fiscal 2027 guidance calls for organic sales between -1.5% and 0.5%, adjusted EPS of $3.00-$3.20, and 4%-5% input inflation. **Cash generation remains the key support:** fiscal 2026 operating cash flow was $2.20 billion, free-cash-flow conversion was 85%, and the company pays a $2.44 annual dividend, producing a yield above 6%. The valuation case rests on pet recovery, $3.00 billion of productivity savings by fiscal 2030, buybacks, and a five-year probability-weighted price of $59.00 versus $38.38 currently.