This 'Boring' Food Titan Just Keeps Growing

Longtime Stansberry Research readers know the power of investing in "boring" businesses...

These companies don't generate the eye-catching headlines of high-growth market darlings like Tesla (TSLA) or meme stocks like GameStop (GME) and AMC Entertainment (AMC).

And their business models are rarely complex or revolutionary...

But that doesn't mean they're bad investments. In fact, strong "boring" businesses can generate steady sales and profits, which lead to solid gains in the market. And that could actually make them better investments than headline-grabbing growth stocks in the long run.

Today's company fits the bill perfectly, even if the pandemic has given its shareholders a taste of high-growth sales in recent years...

General Mills (NYSE: GIS) is a titan of the packaged-foods industry. Its products are found in grocery stores all across the U.S...

As we covered in March 2021, the company boasts well-known brands like Cheerios cereal, Yoplait yogurt, Häagen-Dazs ice cream, Pillsbury dough, Nature Valley snack bars, Betty Crocker baking products, and Annie's organic foods.

In April 2018, General Mills bought popular pet food brand Blue Buffalo. The company says it's the "leading brand in the fast-growing wholesome natural pet food category in the U.S." And it expects Blue Buffalo to continue driving growth and delivering value for shareholders in the long term.

These brands are what make General Mills a "Global Elite" business. They're well-known throughout the country, which helps drive consumer demand. In fact, many customers will buy them without even noticing that they're purchasing General Mills products.

Even better, no matter what's going on in the broader economy, people will still buy cereal, baking products, and pet food. That leads to steady sales growth for the company.

And throughout the pandemic, General Mills' sales skyrocketed.

Sales jumped by 45% in March 2020 and 32% in April 2020, based on Nielsen-measured retail sales. Overall, sales spiked 21% higher for the company in the quarter ending in May 2020. That's incredibly strong growth for a "boring" business like General Mills.

That growth rate returned to normal over time, as it became harder to beat pandemic-boosted quarters. But sales still grew 4% in the 2021 fiscal year, which ended in May. This included a 10% decline in the fourth quarter, where General Mills came up against its toughest comparison. (That was when folks were really panicking and running out to stock up on supplies, from March through May 2020.)

Even so, the company's products are still flying off the shelves...

The pandemic continues to boost demand for General Mills' packaged foods as people spend more time at home – resulting in more at-home cooking and a greater focus on what their pets are eating as well.

In its most recent quarter, General Mills reported mixed results. Earnings came in below estimates due to higher supply-chain costs. That kick-started a sell-off of company shares, causing the stock to fall 4%.

Even after that decline, General Mills shares are still up about 15% over the past year. And they were sitting at a five-year high before the earnings report. So, investors could have locked in profits at multiyear highs during the sell-off.

But the company still has strong prospects. General Mills boosted its sales-growth forecast for the 2022 fiscal year in the same report.

General Mills now projects revenue growth between 4% and 5%. It had previously estimated sales growth between negative 1% and 3%. This change reflects the higher-than-expected demand that General Mills has seen through the first half of the fiscal year.

This is the second straight quarter in which General Mills has boosted its sales forecast. If the company grows sales at the midpoint of the estimated range (4.5%), it will report sales of about $18.9 billion for fiscal year 2022.

That would be nearly 7.5% higher than its sales in fiscal year 2020, which, again, saw a huge spike from the early pandemic lockdowns when people were stocking up on packaged foods.

The pandemic-era boost for General Mills may have peaked in the early days of lockdowns, but its food products are always in demand. And General Mills expects to keep growing steadily. That should continue to be a long-term tailwind for shares of this "boring" business.

Sometimes investing is simple.