This Food Stock Could Be a Safe Bet for Dividend Investors

General Mills agrees to sell European dough businesses

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General Mills, Inc. (NYSE:GIS) is an American multinational manufacturer and marketer of branded consumer foods sold through retail stores. Its portfolio of brands includes household names such as Cheerios, Nature Valley, Pillsbury, Betty Crocker, Yoplait, and more. This afternoon, GIS was last seen down 1.3% at $62.73.

General Mills stock has increased a modest 5% year-over-year and is up 16% since bottoming at a 52-week low of $53.96 in January. Additionally, shares of GIS have grown 6% year-to-date and General Millls stock is currently down just 2% from its 52-week high of $64.65, reached in early June. Moreover, General Mills stock has a forward dividend of $2.04, with a solid dividend yield of 3.21%. 

On Nov. 24, General Mills announced it will be selling its European dough businesses to Cérélia. The proposed transactions would include General Mills branded and private label dough businesses including the Knack & Back and Jus-Rol brands. Each of the transactions is expected to close by the end of fiscal 2022. As part of General Mills Accelerate strategy, the goal here is to focus GIS' portfolio on sustainable and profitable growth through a narrowed focus on its advantaged global platforms.

Meanwhile, in the options pits, traders are looking bearish. This is per the stock's 50-day put/call volume ratio of 1.43 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 96% of annual readings. This means puts are getting picked up at a faster-than-usual clip.

Now could be a good time to weigh in on GIS' next move with options. The security sports attractively priced premiums at the moment, per its Schaeffer's Volatility Index (SVI) of 19%, which sits in the 17th percentile of its annual range.

GIS sports has a decent price-earnings ratio of 16.58. With a market cap of $38 billion and multiple top brands as part of its corporate portfolio, GIS offers a high level of security for investors looking for safe returns on investments. Overall, General Mills stock offers the most opportunity for stock traders as a dividend play.

 

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