Source: General Mills.

Dividend investors love companies that have loyal customers to provide reliable revenue and income, and food giant General Mills (NYSE:GIS) is a great example of how such a company can end up rewarding its long-term shareholders. With a current yield of more than 3%, General Mills is among the more attractive dividend stocks in the market, but some concerns about recent stagnation in its earnings growth, combined with a relatively short track record of boosting its dividends regularly, may make the most discerning dividend investors want to look elsewhere for even better prospects. Let's take a look at three reasons why General Mills falls just short of earning a spot among the top dividend stocks in the market.

1. General Mills' dividend growth is impressive, but it is also relatively recent.
General Mills has done a good job lately of returning more capital to shareholders. Earlier this year, the company raised its dividend by almost 8%, and that followed boosts of 15%, 8%, and 9% in the previous three years.

GIS Dividend Chart

GIS Dividend data by YCharts.

The problem, though, is that as good as an 11-year record of providing annual dividend increases might sound, it's far from the longest such streak in the business. Rival Archer Daniels Midland (NYSE:ADM) has a nearly 40-year streak of annual increases, and elsewhere in the food industry, distribution specialist Sysco (NYSE:SYY) has put together 44 straight years of higher dividends. That doesn't diminish the importance of General Mills' decision to raise its dividends recently, but it does mean investors will want to see an even longer track record before they make long-term conclusions about the sustainability of General Mills' dividend growth.

2. As earnings have been flat, General Mills' payout ratio has risen.
General Mills hasn't made much progress in recent years on the earnings front. Even as revenue has increased, the costs of obtaining the ingredients and raw foodstuffs necessary to make its products have led to similar increases in General Mills' overall expenses. As a result, profitability has plateaued, with earnings per share during the past 12 months weighing in below the company's figure for its 2011 fiscal year.

GIS EPS Diluted (TTM) Chart

GIS EPS Diluted (TTM) data by YCharts.

Combined with higher dividend payments, General Mills has therefore seen its earnings payout ratio climb, as the graph above shows. At 62%, General Mills doesn't have a dangerously high payout ratio, and can still afford to make further dividend increases even if earnings stay flat for another couple of years. Eventually, though, General Mills needs to ramp up its growth in order to support its dividend.

3. General Mills has also looked at other ways to return capital to shareholders.

Source: General Mills.

Dividend growth isn't the only way that General Mills has supported shareholders. Increased levels of stock buybacks have also bolstered shares, with fiscal 2014's $1.75 billion in stock repurchases representing a much larger commitment to the stock than its previous annual activity of roughly $300 million to $1.3 billion during the past five years would suggest. This comes even as the stock has climbed to all-time record high levels.

Stock buybacks aren't always a bad way to return shareholder capital, especially as they give investors the choice of whether to accept the tax consequences of a sale rather than imposing dividend income on them. Yet, the timing of General Mills' buybacks is somewhat suspect, and if current levels prove to be a longtime high, then many will question the company's decision to use so much capital during such a strong period of performance for the shares.

General Mills is a solid choice for dividend investors, and it has plenty of benefits for investors. Yet, because of the concerns that some have about the business, General Mills falls a bit short of being a top dividend stock.