General Mills (NYSE:GIS) reported Q1 earnings yesterday. Does the cereal maker warrant further investigation as a potential investment idea? Let's have a look at the bowl of data.

Net sales increased 7% to $2.86 billion. Operating income jumped 6% to $489 million. Net income rose 6% on a dollar basis, coming in at $267 million; on a diluted per-share basis, the rise was more dramatic at 16%, good for $0.74 a stub. The stock rose more than 3% yesterday on the earnings-beating news, and on a down day for the indexes.

Operating profit for the U.S. territory rose 9%, while income for the International segment dropped 5%. Bakeries and Foodservice increased more than 7%. Looking over the various internal numbers, it becomes obvious that the company had a pretty solid quarter. General Mills was able to favorably affect margins in the U.S. by keeping an eye on the efficiencies of its operations. The drop in the International segment's profit was due to marketing initiatives; keep in mind, though, that sales for the quarter here were 13% higher.

Net cash from operations decreased 34%; the decline was due to changes in working capital. Even so, the operational cash level of $104 million was still enough to satisfy the $61 million that was necessary for capital expenditures. Acquisition activity did, however, eat up the rest of the cash, coming in at $58 million. That's OK, though, as the company is investing for the future; in addition, a look at the most recent 10-K shows that General Mills actually has generated a good amount of free cash flow the past three years.

General Mills is a great consumer brand and a stalwart competitor to companies like Kellogg (NYSE:K) and Kraft (NYSE:KFT). The company is certainly holding its own in this inflationary environment and is fighting the good fight in able manner against private-label brands. From an investing standpoint, if you're looking for a core holding in the foodstuffs sector, you won't necessarily go too wrong with General Mills.

This company has long-term dollar-cost averaging written all over it for many Fools; indeed, you're not necessarily going to buy it for parabolic growth -- have a look at the five-year chart. I'm not necessarily a fan of its dividend history (a quick look at it shows that growth in the dividend the past several years hasn't been spectacular), but the company has been improving on this front by introducing some recent increases. By way of comparison, PepsiCo (NYSE:PEP) has more than doubled its dividend in the past five years or so. Here's another food stock that has a better history -- Hershey (NYSE:HSY). This doesn't mean that you should make a decision just on the recent dividend history, but it is something I want to highlight, as I know there are a lot of dividend fans out there.

Overall, I think General Mills is plodding along nicely. I applaud its resilience in the wake of high commodity costs and think it has a great collection of breakfast properties; it also sports a decent 2.6% yield. And, again, if you're a fan of Cheerios and just must have this stock in your portfolio, you won't necessarily be making a mistake. Speaking for myself, however, I enjoy consumer stocks with more robust dividend histories, so I wouldn't necessarily serve General Mills to my portfolio in the morning.

For more Foolish reading for the breakfast table:

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Fool contributor Steven Mallas owns none of the companies mentioned. The Fool's disclosure policy is the breakfast of champions.