General Mills Inc. Stock Buy Recommendation Reiterated (GIS)

NEW YORK ( TheStreet) -- General Mills (NYSE: GIS) has been reitereated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:
    • The revenue growth greatly exceeded the industry average of 24.6%. Since the same quarter one year prior, revenues rose by 13.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
    • 39.90% is the gross profit margin for GENERAL MILLS INC which we consider to be strong. Regardless of GIS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.50% trails the industry average.
    • GENERAL MILLS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GENERAL MILLS INC increased its bottom line by earning $2.69 versus $2.25 in the prior year. For the next year, the market is expecting a contraction of 5.6% in earnings ($2.54 versus $2.69).
    • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Food Products industry average. The net income has decreased by 0.1% when compared to the same quarter one year ago, dropping from $392.10 million to $391.50 million.

General Mills, Inc. manufactures and markets branded consumer foods worldwide. It also supplies branded and unbranded food products to the foodservice and commercial baking industries. The company has a P/E ratio of 16.2, equal to the average food & beverage industry P/E ratioand below the S&P 500 P/E ratio of 17.7. General Mills has a market cap of $24.49 billion and is part of the consumer goods sector and food & beverage industry. Shares are down 6.5% year to date as of the close of trading on Tuesday.

You can view the full General Mills Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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