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When investing, it sometimes pays to go with what you know. With an unproven plethora of new companies and new innovations around us, old corporate giants can still be a strong foundation for a portfolio.

Today, I'm considering General Mills (NYSE: GIS). What strengths of this company are significant for investors?

Robust revenue

General Mills' net sales for FY 2013 (ended May 26, 2013) increased to $17.8 billion. This represents a 7% increase over the prior year. How does General Mills' net sales compare to others around the breakfast table in its industry?

Kellogg's (NYSE: K) trailing twelve month revenue (NYSE:TTM) is $14.86 billion. J. M. Smucker's (NYSE: SJM) ttm revenue is $5.90 billion. Certainly, all three have significant global sales, but investors should note that General Mills is the clear leader.

Operating cash flow

General Mills' operating cash flow for 2013 was $2.9 billion. Kellogg's ttm operating cash flow is $1.78 billion, while J. M. Smucker's is $855.80 million.

Therefore, investors can note that General Mills is at the forefront here when it comes to generating cash from its business activities. It is creating abundant cash flow from traditional core operations that define the essence of the company.

Levered free cash flow

For investors, it's nice to invest in a company that has the cash needed to pay its shareholders. This levered free cash flow is what a company can pay out to shareholders once it has met its interest payment obligations on its debt. Lots of levered free cash flow means more money available for shareholders.

General Mills' levered free cash flow is $2.06 billion. Kellogg's is $856.62 million. J. M. Smucker's is $658.95 million. It's evident that General Mills can meet its debt obligations and still have ample left over for dividends.

Product innovation

General Mills has noted that its strategy for FY 2014 is to engage in substantial product innovation. Moreover, the company will concentrate on new products as well.

Consider that its original Cheerios product now comes in Multi Grain, Banana Nut, Chocolate, Honey Nut Cheerios Medley Crunch, and others. The company has introduced Soft Baked Oatmeal Squares into its Nature Valley product line. Its Totino's pizza products now include new Pizzeria Rolls in three flavors.

Investors should note that this product innovation is essential for sustainable revenue and profit growth, and increased market share. General Mills' competitors are not standing still on the innovation front.

Kellogg has introduced its new Special K Nourish Hot Cereal at less than 200 calories. It has added crunch to its Pringles line with Pringles Xtra Flavors and fat free Pringles. These are definite moves by Kellogg to address changing consumer tastes.

J. M. Smucker's product innovation includes its organic and low sugar preserves as complements to its traditional jams, jellies, and marmalade. It also offers its Smucker's Uncrustables Sandwiches (crust-less), which are portable portions targeted at the grab 'n go market. Answering consumers' demands for variations on traditional products, and new products as well, is vital to growth for these three companies.

Acquisitions

General Mills acquired Yoki Alimentos SA, a Brazilian food company, in 2012. This was significant for the company because it enabled it to move deeper into the Latin American markets. Yoki produces seasonings, dry soups, snacks side dishes, and other products.

The year prior, General Mills acquired a 51% controlling interest in Yoplait S.A.S. It also acquired a 50% interest in a related entity that holds the global Yoplait brands.

Of note to investors is that Yoplait is a major force in the yogurt arena. Therefore, General Mills gained a brand with an international presence, a strong reputation, as well as substantial traction. This bodes well for continued growth in market share.

For example, the company recently noted that products making the strongest contributions to its 2013 U.S. Retail segment net sales growth included new items including Yoplait Greek 100 calorie yogurt.

What about acquisitions by General Mills' competitors? Kellogg acquired the Pringles line last year, which is a snack product powerhouse. It is important for investors to consider that this approximately US$2.7 billion acquisition makes Kellogg the second-largest savory snack company.

In 2008, J. M. Smucker acquired Folgers Coffee. In 2011, the company acquired Rowland Coffee Roasters' coffee brands and business operations. In 2012, J. M. Smucker acquired a majority of the Sara Lee North American foodservice coffee and hot beverage business.

Investors can take away that these are bold moves by J. M. Smucker to build its market share in the lucrative coffee segment. With Rowland Coffee Roasters, J. M. Smucker has a greater foothold in southern Florida and the U.S. northeast. With the Sara Lee move, the company added a leading liquid coffee concentrate business to its product family.

For investors, all of these acquisitions are important because they highlight proactive management. These management teams are expanding their product portfolio and going after new business in new markets. This is essential to staying viable in a very competitive business and turbulent economic environment.

Conclusion

Fundamental strengths exist within the operations of all these processed & packaged goods companies. In essence, all three are suited to a blue-chip focused portfolio.

However, for me, I'm leaning towards General Mills because of its strong sales, abundant operating and levered free cash flow, and Yoplait acquisition. I believe the company's a quality consumer goods option suited to a conservative investment portfolio.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Conservative Investors, Consider General Mills For Your Portfolios