General Mills, Inc. (GIS) Dividends Could Mean Great Earnings

Stock valuation

To understand the success of General Mills, Inc. (NYSE:GIS), it is important to look at two of its major competitors: Kraft Foods Group Inc (NASDAQ:KRFT) and Kellogg Company (NYSE:K).

Kraft has seen a volatile earnings trend in the last 5 years. The average growth rate is a loss of 3%. It recently announced that 2013 should see a further decline in earnings. It anticipates a decline of 10.7% due to inventory reductions. Based on comparable price to earnings ratios and a slight decline in earnings, the price target for Kraft is $52.05.

Kellogg, too, has seen a mix of earnings. Even with the rising food costs, Kellogg expects a growth of 4.71% in its earnings next year. Its focus on “lean” and healthy foods has made it attractive in a health-conscious market. This intensive and focused marketing will help it grow its earnings in the coming years.

General Mills, Inc. (NYSE:GIS) has been outperforming both Kraft and Kellogg. The continual increase in dividends with their earnings growth in the past has made it a strong company to buy. Rising food costs and changes in consumer demands will slow the growth in the next year, though.

With a 4% growth rate, the target price for General Mills is $50.71.

Austin Higgins is the Principal Consultant for Avant Venture Group. and focuses on building businesses through innovation, growth and investment. Read his company’s blog at BuildInvestGrow.com and follow him on Twitter @Austin_Higgins.

The article General Mills Dividends Could Mean Great Earnings originally appeared on Fool.com and is written by Austin Higgins.

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