The stock market is filled with stocks that cater to the different requirements of investors. There are some that look for short term gains and some that look for long term returns. Few investors want only dividend stocks and there are few others who are satisfied with gains through just share price increases. There are certain must-buy stocks in each of these categories. What is the best stock, according to investment experts, for investors who want to stay in the stock market for a long time and reap benefits? There is one stock that scores quite heavily in terms of diversification and brand reputation – General Mills (GIS, Financial). This is the name behind many famous brands and is known for its stability of performance and longevity of its dividends. Let us now see why this company is the best-stock to buy and hold for many more years in the future.
Products are not only diverse but famous
We have seen companies that try to diversify their product range without any logic. Most companies that get into unsuccessful diversifications are under the misconception that they can target a large number of customers if they have a big product base. However, the customers of today are quite shrewd. They prefer a company with one single famous product to a company with a large number of unsuccessful products. Success dominates quantity. In such a scenario, a company like General Mills with over 100 famous and respected brands is sure to reach great heights. It is not surprising to see a company that has been running its operations for over a century now, making it to the list of must-buy stocks. Baking products, cereals, dairy products, fruits, organic foods, ice-creams etc. are all made by General Mills and most of its products are staple foods in many US households. From 1990, the company has been outperforming its industry’s growth by a large extent as can be seen from the graph below:
Focus on shareholders’ worth
One of the best things about General Mills is that it cares a lot for its shareholders. Every year, the company not only returns a good amount of money to shareholders as dividends, but also buys back its shares frequently from the market every year. Recently, the company has been focusing on these share repurchases to a great extent, thereby reducing the number of its outstanding shares floating in the market, by a large number. For the last four years, the break-up of share repurchases and dividends of General Mills is shown in the below picture:
The above values are year-to-date figures and since the company has been consistently providing good returns to investors, it is one of the most-respected names in the stock market today. Some of the products that come from General Mills like Cheerios, Pillsbury, Green Giant and the like are the ones that are used by millions of customers all over the US every day. With these daily use products, General Mills has positioned its brand strongly in the minds of customers. In order to cater to the health-conscious people, General Mills also gives special focus to organic foods that are both natural and healthy. To take this initiative forward, it recently took over Annie’s, which is a well-known name in the organic food industry. General Mills has been taking the right steps at the right times, towards cementing its place as one of the most loved brands in the world today.
Conclusion
Investors should be careful to invest only in those stocks like General Mills that have a sensible diversification in its products, if they want to get the full benefit from the success of these brands. In addition to diversification, the other point that investors need to watch out for, is the company’s ability to provide reasonable returns in the form of dividends, share repurchases or both. This way, General Mills is one of the few companies in the world that caters to all the needs of its patient and loyal customers in a very rewarding manner.
