While many people may know General Mills (NYSE: GIS) for its variety of delicious consumer goods products (Cheerios, Yoplait, and Nature Valley, to name a few), not many investors would think of the company as a profitable stock. But after good news in its first-quarter earnings report, more people may be paying attention to this often-overlooked company that we all see on store shelves every day.

Early this morning, General Mills announced that earnings rose an impressive 35%, with a profit of $548.9 million. That's $0.82 per share, up from $0.61 per share in the same quarter last year. Sales increased 5.3%, which the company attributed to higher pound volume.

Everything wasn't sunshine and Lucky Charms for the company, though. Although its gross margin rose 2.6%, several important divisions within General Mills suffered some minor setbacks. Its U.S. retail segment saw operating profit fall 1.7% thanks to a 0.7% decrease in net sales. Sales at the company's bakery and foodservice division dropped 2%, though operating profit grew 10%. But sales at the company's international segment grew 27% to $1.09 billion, which created an impressive 56% boom in that division's operating profit.

Although the news may be mixed for the company, General Mills is one of many within the food industry that are struggling with the global market. On one hand, consumers are still very budget-conscious and are focused on getting the most bang for their buck with cheap, bulk foodstuffs.

On the other hand, the drought in the Midwest and rising raw-material costs are slashing margins, not to mention forcing companies to cut back as much as possible. That's one of the reasons General Mills plans to cut about 2% of its workforce in the near future.

Of course, General Mills isn't the only company feeling the squeeze. Let's see how it compares with its competitors.

Company

P/E

Quarterly Revenue Growth

Operating Margin

Dividend Yield

General Mills 16.73 12% 16% 3.4%
Kellogg (NYSE: K) 15.31 3% 15% 3.5%
Tyson (NYSE: TSN) 12.39 1% 3% 1%
Kraft (NYSE: KFT) 20.10 (4%) 14% 2.9%

Sources: Yahoo! Finance and Fool.com.

General Mills has better revenue growth and a larger operating margin than any of its competitors, not to mention an impressive dividend yield. Combined with a decent P/E ratio, the company looks like a solid investment. So remember, while Trix are for kids, investing in General Mills is for you!

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