Investors often flock to GE Aerospace, formerly General Electric, for its cutting-edge aviation technologies and diverse business offerings. Similarly, General Mills, a global leader in consumer food manufacturing, presents a compelling investment opportunity.
This year, GE Aerospace’s stock has surged by an impressive 23%, while General Mills’ shares have seen a respectable 8% uptick. Given these developments, it’s wise to assess whether now is the opportune moment for investors to consider these iconic companies for further growth.
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Growth Trajectories
GE Aerospace’s remarkable year-to-date rally is backed by optimistic projections for its annual earnings. Forecasts predict a staggering 64% surge in fiscal 2024 to $4.61 per share from $2.81 per share in the previous year. Moreover, expectations for FY25 indicate a further 29% earnings growth to $5.97 per share. On the revenue front, total sales are anticipated to climb 8% this year and another 7% in FY25, reaching $76.02 billion.
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Comparatively, General Mills is expected to witness 5% EPS growth in FY24, with FY25 earnings projected to rise 3% to $4.65 per share. While total sales might experience a slight decline in FY24 to $20.04 billion, FY25 forecasts suggest a 1% increase to $20.24 billion.
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P/E Valuations
GE Aerospace’s stock, trading around $155 a share, commands a forward earnings multiple of 33.9X, notably higher than the Zack’s Diversified Operations Industry average of 21.3X and the S&P 500’s 21.9X. Despite this premium valuation, GE Aerospace shines among its conglomerate peers, which include notable companies like Honeywell International and 3M.
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On the other hand, General Mills’ stock is priced at $70 per share, boasting a more attractive 15.4X forward earnings multiple. This valuation is notably lower than the benchmark and the Zacks Food-Miscellaneous Industry average of 17.1X. Competitors like Kraft Heinz and Conagra Brands operate in the same sphere.
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Dividend Comparison
General Mills stands out with a 3.38% annual dividend yield, surpassing the S&P 500’s 1.3%. In contrast, GE Aerospace’s dividend yield remains modest at 0.2% after scaling back payouts post-pandemic.
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Bottom Line
The remarkable upturn in GE Aerospace’s financial performance has undoubtedly captured investors’ interest, coupled with the stellar price performance of its stock this year. However, General Mills’ reasonable valuation and attractive dividend yield are equally compelling. Currently, both stocks hold a Zacks Rank #3 (Hold), indicating a cautiously optimistic outlook.
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