General Mills and Kellogg Under Review: Food Industry Struggles with High Agricultural Input Costs

Feb 14, 2013, 08:00 ET from

LONDON, February 14, 2013 /PRNewswire/ --

Processed Food industry is successfully navigating through myriads of problems. Despite, increased cost due to poor weather conditions and subsequent agriculture products shortage, companies like General Mills Inc. (NYSE: GIS) are growing. The industry also faces regulatory challenges as it faces the prospects of steep rise in dairy inputs. Kellogg Company (NYSE: K) plans to launch new product lines to capture bigger share of the market. Food industry is set to grow this year, thanks to increase in demand. StockCall has released free charting and technical research on these two aforementioned companies. Register to read these reports at  

General Mills Presents a Steady Growth Story

General Mills has good track record of growing its earnings at the rate of 7 percent per annum and it is expected to retain the momentum. It also has attractive net margin in the range of 8 to 12 percent. With these impressive multiples, the company stock appreciated over 6 percent so far this year. The stock trades at Price/Earnings multiple of 15.86, which is in-line with industry average. General Mills is currently in a bullish phase as its stock touched a new 52-week high. Apart from capital growth, it also offers dividend yield of over 3 percent, making it an attractive stock for income investors. It has been paying dividend for the past 13 years. Sign up for the free report on General Mills Inc. at  

General Mills has a well diversified portfolio of food products and is a front runner in its industry. Its second quarter adjusted earnings stood at 86 cents per share, up 13 percent. The company is also fueling its growth through acquisitions. General Mills has two joint ventures running with Cereal Partners Worldwide and Haagan Dazs Japan.

The company is expected to grow its revenue by 4.5 percent in the FY2013. It also plans to launch new products to boost its revenue. General Mills holds a leadership position in its space and has economies of scale. It derived one third of its revenue from markets outside of the U.S. The Processed & Packaged Goods company also rewards its investors by buying back shares. In the past seven years, it has reduced its share count by 20 percent. With improvement in U.S. weather, input costs are likely to come down to normal levels. General Mills' stock is expected to respond positively to better revenue and profit margin.

Kellogg Company Performs Well in Q4

Kellogg Company reported excellent results for its fourth quarter of the year. The company is the leading brand of breakfast cereals and also offers frozen food and snacks. For the fourth quarter, its revenue stood at $3.6 billion, up 18.2 percent from the revenue figure for the corresponding quarter of last year. Kellogg Company free technical report can be accessed by signing up at  

Kellogg Company seeks to augment its position in the market by appealing to health-conscious consumers. It is developing new product lines with controlled calories content. Its other focus is to develop healthy yet convenient food. With new innovations on this front, the company expects to grow its revenue further in 2013.

Kellogg Company reported impressive growth for its frozen food business in 2012, while its snacks unit remained stagnated. However, the company plans to beat the sluggishness in the U.S. markets by expanding abroad. Kellogg's stock appreciated 20 percent in past 52 weeks and offers 2.97 percent dividend yield.  

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