General Mills, Inc. (NYSE: GIS) Board of Directors today declared a two-for-one split of General Mills common stock. The split will be effected in the form of a 100 percent stock dividend. Shareholders of record at the close of business on May 28, 2010, will receive one additional share of General Mills stock for each share then owned. These additional shares will be distributed beginning June 8, 2010.
Chairman and Chief Executive Officer Ken Powell said, “This action by our board recognizes General Mills’ strong, long-term equity-market performance, our current business momentum and our promising growth prospects. It also reflects our commitment to maintaining a market price range for our shares that is attractive to individual investors.”
Since General Mills was incorporated in 1928, the company’s common stock has split seven previous times, most recently as a two-for-one split on November 8, 1999. From a split-adjusted closing price of $41.69 on that date, shares of GIS appreciated 71 percent to $71.16 as of market close on April 30, 2010. Over that same time period, the S&P 500 Index declined 14 percent from $1377.01 to $1186.69. “General Mills’ categories and our leading brands have proven to be very resilient over time,” said Powell. “During the past decade, our company underwent a major transformation with the acquisition of Pillsbury, faced a sustained period of high input cost inflation and a global economic recession. Despite these challenges, we have delivered strong business performance and generated solid returns for our shareholders.”
From November 1999 through April 2010, total return to General Mills’ shareholders through stock price appreciation and dividends compounded at an 8 percent annualized rate, compared to an annualized return of less than 1 percent for the S&P 500. General Mills’ annual cash dividend has grown from $1.08 in fiscal 1999 to $1.92 in fiscal 2010. The company and its predecessor firms have paid dividends without interruption or reduction for the past 111 years.
let me ask a possible silly question...I have never been involved in a split before...lets say a person owns 100 shares prior to the split thus their quarterly div have been $49.00...after the split the person will have 200 shares...how does the div work? does that mean you now get $98.00??
No, unless the board declares something special the dividend would be one half making the $49 dollar payout the same. However in many cases the board ups the dividend slightly when the split occurs. No info as of yet it anything is going to happen. Assume the dividend rate will be ine half.