General Mills, Inc (NYSE:GIS) a Safe Horse to Bet on Still?

General Mills, Inc (NYSE:GIS) has a reputation of a company that has a great return rate; the company is benevolent to its customers in terms of giving a good robust dividend. These are the traits of a company that is formidable enough to attract good buyers. But on a closer inspection, there are loopholes in General Mills, Inc (NYSE:GIS)’ otherwise clean framework. The company’s earnings growth is quite slow, and it has a history of not raising its dividends for a considerable amount of quarters.

General Mills, Inc (NYSE:GIS) has been bestowing its shareholders with a good amount of return lately as it raised its dividend by almost 8 percent, following surges in the past three years. But the point we are trying to make is that it’s relatively recent. Before that, General Mills Inc (NYSE:GIS) had a flat dividend just like any other company. There are rivals in the market with annual increases of up to 40 consecutive years.

We must remember that a potential buyer is only attracted to the dividend stock that is formidable, not turbulent. General Mills, Inc (NYSE:GIS) is currently morose on its earnings front, while it’s spending is climbing. This means the chance for profitability is considerably lower than expected, resulting in lower dividend margins. We aren’t saying General Mills, Inc (NYSE:GIS) is in the danger zone.

It’s surely strong enough to increase its dividend over the next couple of years, just that the potential of a profit seems unlikely. General Mills, Inc (NYSE:GIS) also repays its shareholders through stock buybacks; normally stock buybacks arent such a bad idea since the shareholders are presented with a choice to sell their shares without worrying about tax consequences, however in this case it’s worrying for investors who think that General Mills, Inc (NYSE:GIS) is out of internal choices to provide them with large returns.

Once investors get an idea that you’re short on monetary accumulation, they start to pull out and start dumping the stock rapidly. General Mills, Inc (NYSE:GIS) is a veteran company and is not as robust as most, but when it comes to dividend stock it has the potential to grow and please its investors. The trick here for investors is to stick around and stay loyal to the company because General Mills, Inc (NYSE:GIS) has the ability to pile up money in a short time.

The tip we can give to the shareholders is that they should stick by General Mills, Inc (NYSE:GIS) because someday they’ll be thankful for investing in such a company. As for General Mills, Inc (NYSE:GIS), it has to eliminate the reservations and cautions of the stockholders who think that General Mills, Inc (NYSE:GIS) is short on profits. If that is actually the case, then General Mills, Inc (NYSE:GIS) should tend to the matter and decrease its spending or any other measures it thinks suitable.

If it is one time spending which is eating up profit numbers, then it won’t hurt the company profits but if not, then General Mills, Inc (NYSE:GIS) has something to worry about.