General Mills Inc. Stock Buy Recommendation Reiterated (GIS)

Editor's Note: 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.

NEW YORK ( TheStreet) -- General Mills (NYSE: GIS) has been reiterated 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 increase in stock price during the past year, revenue growth, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The revenue growth significantly trails the industry average of 44.3%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 39.10% is the gross profit margin for GENERAL MILLS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.09% is above that of the industry average.
  • Net operating cash flow has increased to $828.30 million or 16.26% when compared to the same quarter last year. In addition, GENERAL MILLS INC has also vastly surpassed the industry average cash flow growth rate of -46.28%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Food Products industry and the overall market on the basis of return on equity, GENERAL MILLS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.

General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company also supplies branded and unbranded food products to the foodservice and commercial baking industries. General Mills has a market cap of $29.37 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 16.8, below the S&P 500 P/E ratio of 17.7. Shares are up 12.4% 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.

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