Comparing Flowers Foods (NYSE:FLO) and General Mills (NYSE:GIS)

Flowers Foods (NYSE:FLO) and General Mills (NYSE:GIS) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Dividends

Flowers Foods pays an annual dividend of $0.50 per share and has a dividend yield of 6.0%. General Mills pays an annual dividend of $2.44 per share and has a dividend yield of 6.6%. Flowers Foods pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Mills pays out -1,355.6% of its earnings in the form of a dividend. Flowers Foods has raised its dividend for 24 consecutive years and General Mills has raised its dividend for 5 consecutive years. General Mills is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Flowers Foods and General Mills”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flowers Foods	$5.26 billion	0.33	$83.82 million	$0.35	23.61
General Mills	$18.42 billion	1.08	-$87.60 million	($0.18)	-206.63

Flowers Foods has higher earnings, but lower revenue than General Mills. General Mills is trading at a lower price-to-earnings ratio than Flowers Foods, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for Flowers Foods and General Mills, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flowers Foods	2	5	0	0	1.71
General Mills	7	11	4	0	1.86

Flowers Foods presently has a consensus price target of $9.60, suggesting a potential upside of 16.15%. General Mills has a consensus price target of $39.16, suggesting a potential upside of 5.28%. Given Flowers Foods’ higher possible upside, analysts clearly believe Flowers Foods is more favorable than General Mills.

Insider & Institutional Ownership

75.5% of Flowers Foods shares are held by institutional investors. Comparatively, 75.7% of General Mills shares are held by institutional investors. 7.2% of Flowers Foods shares are held by company insiders. Comparatively, 0.3% of General Mills shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Flowers Foods and General Mills’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flowers Foods	1.38%	15.98%	5.11%
General Mills	-0.48%	21.37%	5.94%

Volatility & Risk

Flowers Foods has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500. Comparatively, General Mills has a beta of -0.03, indicating that its stock price is 103% less volatile than the S&P 500.

Summary

General Mills beats Flowers Foods on 9 of the 17 factors compared between the two stocks.

About Flowers Foods

Flowers Foods, Inc. produces and markets packaged bakery food products in the United States. Its principal products include fresh breads, buns, rolls, snack items, bagels, English muffins, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates bakeries. Its customers include national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries; wholesale distributors; mass merchandisers, supermarkets, vending outlets, and convenience stores; quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies; and public health care, military commissaries, and prisons, and other governmental institutions. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.

About General Mills

General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates through four segments: North America Retail; International; Pet; and North America Foodservice. It offers grain, ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and savory snacks, ice cream and frozen desserts, unbaked and fully baked frozen dough products, frozen hot snacks, ethnic meals, side dish mixes, frozen breakfast and entrees, nutrition bars, and frozen and shelf-stable vegetables. The company also manufactures and markets pet food products, including dog and cat food; and operates ice cream parlors. It markets its products under the Annie’s, Betty Crocker, Bisquick, Blue Buffalo, Bugles, Cascadian Farm, Cheerios, Chex, Cinnamon Toast Crunch, Cocoa Puffs, Cookie Crisp, Dunkaroos, Edgard & Cooper, Fiber One, Fruit by the Foot, Fruit Gushers, Fruit Roll-Ups, Gardetto’s, Gold Medal, Golden Grahams, Häagen-Dazs, Kitano, Kix, Lärabar, Latina, Lucky Charms, Muir Glen, Nature Valley, Nudges, Oatmeal Crisp, Old El Paso, Pillsbury, Progresso, Tastefuls, Total, Totino’s , Trix, True Chews, True Solutions, Wanchai Ferry, Wheaties, Wilderness, and Yoki brands. The company sells its products to grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores, and pet specialty stores. General Mills, Inc. was founded in 1866 and is headquartered in Minneapolis, Minnesota.