General Mills Pays More Than Realty Income, but Its Cushion Is Thinner

General Mills offered a 7.7% dividend yield in the source comparison, well above Realty Income's 6.1%. The larger check is tempting, but it arrives with a thinner cash cushion and a business that is still adjusting to weaker earnings and higher leverage.

General Mills paid roughly $1.31 billion of dividends against $1.55 billion of trailing free cash flow, an 85% payout ratio. Management plans to hold the dividend rate flat while reducing debt. Fiscal 2027 guidance calls for adjusted earnings of $3.00 to $3.20 a share and an 8% to 13% decline in adjusted operating profit in constant currency, so the yield is not backed by near-term profit growth.

Realty Income's dividend used 75% of 2025 AFFO. The real-estate investment trust also raised 2026 AFFO guidance to $4.44 to $4.45 per share after deploying $2.6 billion in the second quarter. AFFO is the relevant cash-earnings measure for a REIT because it adjusts net income for large non-cash property depreciation and selected gains or losses.

Neither company is low risk. General Mills must rebuild organic growth while paying down debt after portfolio changes. Its first-quarter operating cash flow fell to $298 million from $397 million a year earlier, partly because of tax timing. Realty Income depends on capital markets and acquisition spreads, and its leverage remains substantial.

The higher General Mills yield compensates investors for a more immediate earnings and balance-sheet challenge. Realty Income starts with better coverage and a visible acquisition engine, though rising borrowing costs could narrow that advantage. The next useful evidence is General Mills' debt reduction and free cash flow, versus Realty Income's cost of capital and investment volume. A yield comparison without those drivers would mistake price for safety.