GE Aerospace, fondly known as General Electric, boasts a history of innovative aviation solutions, while General Mills’ stock, tagged as GIS, shines in the realm of global consumer food manufacturing. The stocks of these iconic entities have seen significant growth this year, with GE Aerospace climbing +23% and General Mills not far behind with an impressive +8% increase. Now, the question beckons: Is it time for investors to dive into these stalwarts for more future upside?
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Growth Trajectories
GE Aerospace is in the fast lane with the yearly earnings projected to skyrocket by 64% in fiscal 2024 to $4.61 per share, compared to $2.81 per share last year. Even more eye-catching, FY25 earnings are anticipated to surge by 29% to $5.97 per share. On the revenue front, total sales are estimated to climb 8% this year and another 7% in FY25, reaching a staggering $76.02 billion.
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In comparison, General Mills projects a modest 5% growth in EPS for FY24, with an additional 3% rise to $4.65 per share expected in FY25. While FY24 sales might experience a slight dip to $20.04 billion, they are forecasted to rebound in FY25, inching up 1% to hit $20.24 billion.
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P/E Valuations
GE Aerospace stands at a formidable $155 per share, trading at a forward earnings multiple of 33.9X. This figure, considerably above the Zack’s Diversified Operations Industry average of 21.3X and the S&P 500’s 21.9X, cements GE Aerospace’s status among multi-sector conglomerates. Noteworthy peers include Honeywell International (HON) and 3M (MMM).
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On the other hand, General Mills trades at a more modest $70 per share with an attractive 15.4X forward earnings multiple. This valuation, below both the benchmark and the Zacks Food-Miscellaneous Industry average of 17.1X, places General Mills in good stead. Rivals such as Kraft Heinz (KHC) and Conagra Brands (CAG) are nipping at its heels.
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Dividend Comparison
In the dividend arena, General Mills boasts a notable 3.38% annual yield, outshining the S&P 500’s 1.3%. Contrastingly, GE Aerospace lags behind with a 0.2% yield post its dividend reduction in light of the pandemic.
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Bottom Line
The meteoric rise in GE Aerospace’s financial performance and stock price commands attention. Yet, General Mills’ combination of reasonable valuation and a generous dividend is equally compelling. Currently, both stocks receive a Zacks Rank #3 (Hold), leaving investors with a tantalizing dilemma on hand.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
