On June 21, Kellogg (K -0.96%) announced that it plans to split into three different companies next year. Consumers may associate the company primarily with its iconic breakfast cereals, but it has many diverse brands under its corporate umbrella. 

However, if you're a Kellogg shareholder, it's likely because of its dividend. And because of this, you're likely wondering what's going to happen to your quarterly payments after the spinoffs. Here's what we know so far.

Three Kellogg companies

Kellogg's placeholder designations for the future new companies are "Global Snacking," "North America Cereal," and "Plant." Global Snacking will get brands like Pringles and Cheez-It, North America Cereal will obviously get iconic names like Frosted Flakes and Apple Jacks, while Plant will take the company's plant-based meat, MorningStar Farms.

Kellogg got its start in breakfast cereals. However, this is no longer its biggest business. As a whole, the company had over $14.1 billion in sales in 2021, and the brands that fall under Global Snacking's purview accounted for over 80% of those revenues. North America Cereal brands accounted for about 17%, while Plant's MorningStar Farms contributed the final 3%. 

The company will first spin off North America Cereal, then Plant. Those who own Kellogg stock when it does so will receive shares of the new companies. 

Kellogg paid a dividend of $0.58 per share in the second quarter, but announced that it would bump that to $0.59 per share in the third quarter. At today's share price, Kellogg has a dividend yield of about 3.2%, which makes it an attractive high-yield opportunity. 

Kellogg's management has said that both Global Snacking and North America Cereal will pay dividends, and that the sum of these dividends should be comparable to what Kellogg is paying now. So income investors can breathe a sigh of relief. 

Why Kellogg is doing this

Coming out of the Great Recession, Kellogg's revenue largely plateaued. In 2011, it acquired the Pringles brand, kicking off a decade of diversification away from breakfast cereals. However, the company has still struggled to sustain top-line growth. Here's what its revenue looks like since the start of this millennium. 

K Revenue (TTM) Chart

K Revenue (TTM) data by YCharts. Shaded areas represent recessions.

When companies are big and struggling to grow, management teams often conclude that they're lacking focus. Therefore, to better focus on the individual needs of the diverse business units, the company splits. 

Kellogg believes that splitting will help it achieve the growth that has eluded it for so long. As CEO Steven Cahillane said to analysts during its June conference call: "This is just the next unlock in that transformation journey and deploying for growth by shaping a growth portfolio." 

Hidden in this message from Cahillane is what's really going on. Kellogg has two better growth opportunities: Global Snacking and Plant. Management highlighted that both of these divisions averaged high single-digit percentage sales growth in 2020 and 2021. By contrast, management didn't offer any growth figures for North America Cereal in its presentation. Rather, it said the goal for that segment was to "improve profit margins."

In other words, Kellogg is packaging its no-growth brands into one company and spinning it off -- they aren't part of the growth portfolio Cahillane mentioned. Spinning these brands out will put the other two companies in a better position to highlight their growth. However, it could make the North America Cereal company unappealing to shareholders. After all, it will be hard to grow the dividend without any growth in the business.

Therefore, income investors will have a challenging decision to make once Kellogg splits. The Global Snacking stock will have growth and a dividend. The Plant stock will have growth, but no dividend. And North America Cereal stock will have a dividend, but little growth. This dynamic may make Global Snacking the only appetizing stock for income investors.

Fortunately, Kellogg shareholders don't have to make any decisions today. More details about the spinoffs should be revealed in coming quarters. And management intends to finish the spinoff process by the end of 2023, so there's plenty of time to patiently evaluate which of these three stocks -- if any -- you want to hold for the long term.