General Mills (GIS): A Recession-Proof Dividend Stock Amidst the AI Energy Boom
General Mills, Inc. (NYSE:GIS) has been recognized as one of the 10 Best Recession Proof Dividend Stocks to Buy. This article explores how General Mills maintains stable payouts during economic downturns and touches upon the emerging opportunity in AI-related energy infrastructure. While GIS offers stability, an AI-focused energy play with potential for significant returns is also discussed.
General Mills' Resilience and Dividend History
Founded in 1866, General Mills (GIS) refocused on consumer foods in 1995 and now offers a diverse portfolio of packaged meals, cereals, snacks, baking goods, and pet food. The company's strength lies in its core brands, which have been household staples for decades. Significant investments in advertising and innovation have ensured that General Mills products reach over 95% of US households and maintain leading positions in their respective categories.
Because consumers expect to find these brands in stores, General Mills, Inc. (NYSE:GIS) possesses considerable pricing power with retailers, enabling it to effectively manage inflation. The company's resilience was evident in 2010, a tough economic period, when it delivered record results, including increased sales, improved margins, profit growth across all segments, and strong cash flow.
General Mills, Inc. (NYSE:GIS) has consistently paid dividends to shareholders for the past 127 years, making it a reliable dividend stock. The company currently offers a quarterly dividend of $0.61 per share, with a dividend yield of 4.87% as of September 26.
The Hidden Opportunity in AI Energy Infrastructure
While GIS offers a stable investment, the article suggests that certain AI stocks present greater potential for upside and reduced downside risk. The rise of artificial intelligence is creating an unprecedented demand for energy. Each ChatGPT query, model update, and robotic advancement consumes substantial amounts of electricity, straining global power grids.
A little-known company is positioned as a "toll booth" operator in the AI energy boom. It owns critical nuclear energy infrastructure assets and is capable of executing large-scale engineering, procurement, and construction (EPC) projects across oil, gas, renewable fuels, and industrial infrastructure. This company is also strategically involved in U.S. LNG exportation, which is expected to grow under President Trump's renewed "America First" energy policies. The company stands to profit from tariffs and the onshoring trend.
Why This AI Energy Play is Undervalued
This company is riding the tailwinds of AI, energy, tariffs, and onshoring, yet it remains undervalued. Unlike many energy and utility firms burdened by debt, this company is debt-free and has a significant cash reserve. It also holds an equity stake in another AI company.
Excluding cash and investments, this company is trading at less than 7 times earnings, making it an attractive investment opportunity tied to the AI infrastructure supercycle, the onshoring boom driven by Trump-era tariffs, and a surge in U.S. LNG exports. It also has a unique foothold in nuclear energy.
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