Investing

Two Food Giants Yield Over 7%. Only One Has the Cash to Back It Up

General Mills and Kraft Heinz both hand income investors a yield above 7%, but the cash sitting behind those payouts tells two very different stories about which quarterly check is actually safe.

By Chris Lange
Published October 16, 2026, 8:15am ET · 3 min read

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A close-up of a person's right hand, wearing a dark suit jacket and white shirt cuff, pointing a finger at a glowing blue hexagonal icon labeled 'DIVIDENDS' on a transparent digital display. Other illuminated blue hexagonal icons on the screen depict a clock, a wavy line graph, two stylized human figures, a dollar sign with an arrow, and a bar chart, all interconnected by bright blue lines against a blurred, dark background.
A digital display featuring 'DIVIDENDS' highlights the focus for income investors navigating complex financial choices, as discussed in the General Mills vs. Kraft Heinz comparison. © Funtap / Shutterstock.com

General Mills (NYSE:GIS | GIS Price Prediction) or Kraft Heinz (NASDAQ:KHC): which dividend is the safer bet for someone living off their portfolio right now? Both pay yields above 7%. General Mills yields 7.67% and Kraft Heinz yields 7.13%. Both companies expect lower operating profit this year. Only one of them has a cash reserve that matches its yield.

GIS price target

KHC price target

Dividend Track Record: General Mills Wins on History

General Mills is paying dividends for the 127th consecutive year without interruption. Its quarterly payout rose from $0.49 in 2020 to $0.51, then $0.54, $0.59, $0.60 and finally $0.61 in July 2025. That run has now stalled. The board declared $0.61 again in July 2026 and on September 29, 2026, so this year brought no increase.

Kraft Heinz has a weaker record. It cut its quarterly payout from $0.625 to $0.40 starting with the March 7, 2019 ex-dividend date. It has paid $0.40 every quarter since, most recently on September 25, 2026. General Mills clearly has the edge here.

Payout Coverage: Kraft Heinz Has the Wider Margin

General Mills pays $2.44 a year against fiscal 2027 adjusted EPS guidance of $3.00 to $3.20, which sets the payout ratio at roughly 76% to 81%. Earnings are also moving the wrong way: adjusted EPS was $3.55 in fiscal 2026. Free cash flow that year was $1.63B, against $1.3153B in dividends. That covers the dividend only about 1.24 times. In the first fiscal quarter, dividends of $330.5M topped operating cash flow of $297.8M.

Kraft Heinz’s payout ratio is similar, at about 77% to 79% of its raised adjusted EPS guidance of $2.03 to $2.09. Its cash coverage is much stronger. Free cash flow of $3.66B in 2025 covered $1.898B in dividends about 1.93 times. Management also guides to free cash flow conversion of ~110%, compared with ~95% at General Mills. Kraft Heinz takes this round.

GIS earnings explorer

KHC earnings explorer

Balance Sheet and Brand Momentum: Kraft Heinz Carries Its Load Better

General Mills has $13.614B of debt and holds just $433.1M in cash. That debt equals roughly 4.0 times trailing EBITDA. Kraft Heinz has more debt in dollar terms, at $19.001B, but it holds $2.419B in cash and its leverage is lower, at about 3.5 times EBITDA.

The brand stories are also heading in different directions. Cheerios, Pillsbury and Blue Buffalo make up a strong portfolio, but General Mills’ North America Retail sales fell 7% last quarter. The company also took $1.75B in impairments on its pet business. Kraft Heinz recorded a larger $7.4B non-cash impairment, but the operating trend is better: adjusted EPS beat estimates for the fifth consecutive quarter, Emerging Markets rose 10.4% and management raised full-year guidance.

It is also adding $100M to brand investment, bringing the 2026 total to about $700M. That money supports brands such as Heinz and Philadelphia. On Mad Money, Jim Cramer said Kraft Heinz “actually has the best story” among the high-yield food stocks.

GIS analyst ratings

KHC analyst ratings

Verdict: Kraft Heinz Is the Safer Dividend

Kraft Heinz wins for income investors who need the quarterly check to keep coming. Its dividend suffered a cut in 2019, and that reset is now its biggest strength. The $0.40 payout is covered nearly twice by free cash flow, supported by more cash and lower leverage, and backed by guidance that is rising. Investors who hold Kraft Heinz should expect a flat dividend.

General Mills has the better record and the slightly higher yield, but the numbers behind the payout are getting weaker. Its earnings guidance is lower, its free cash flow coverage is thin and its run of raises stopped this year. Shares have fallen 26.82% over the past year, which shows investors are already pricing in that risk. General Mills fits only the investor who values a 127-year run more than current coverage. For income built on reliable payouts, Kraft Heinz has the stronger dividend profile. Investors should track General Mills’ cost-savings progress and Kraft Heinz’s free cash flow conversion in upcoming earnings reports.

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Chris Lange

Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.

His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.

When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.

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