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Eat Your Wheaties! A Look at General Mills

|Includes: General Mills, Inc. (GIS)
Big G cereals, Totinos pizzas, Green Giant vegetables----not the exciting stuff of a high growth company--but instead solid base businesses for a very solid food company.

General Mills (ticker:GISrecently released stellar earnings for the 3rd quarter ending February 27, 2011   Now the top line left something to be desired, but were in line with just what you get with General Mills -- slow growth, dependably good earnings and a 3% yield.

Sales for the quarter were up around 3% from last years quarter while they held SG & A totally flat---bringing buckets full of added income to the bottom line.  Earnings were up a super 18%  while per share earnings were up 23% benefiting from an ongoing share buyback program.

General Mills has had a rather stagnant domestic food business for years with declines in sales of old line brands such as Pillsbury and Big G at least partially offset by sales in newer lines such as Cascadian Farm, Nature Valley, Fiber One and Yoplait.  

International sales are the driver of sales growth with General Mills---even though at this time they represent less than 20% of sales and 10% of income--they are the future and the company is well aware of this fact as they negotiate for global rights to the Yoplait Brand (they have only U.S rights at this moment).
With modest growth, exceptional cost control and an ongoing share buyback program in place we expect General Mills to continue to show excellent per share earnings.  Additionally we fully expect to see a 2 or 3 cent increase in the quarterly dividend in the months ahead.
For conservative investors looking for that 10% total return we think that GIS may provide at least that in the coming year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.