“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a five-year holding period (or longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. That discipline is particularly relevant for defensive, dividend-paying names in the consumer staples sector, where returns are often driven as much by income and valuation as by rapid earnings growth.
In that context, we look at how such a long-term strategy would have worked out for investors in General Mills Inc (NYSE: GIS) who bought in 2021 and held through to today.
| Start date: | 03/19/2021 |
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| End date: | 03/18/2026 | ||||
| Start price/share: | $60.07 | ||||
| End price/share: | $37.59 | ||||
| Starting shares: | 166.47 | ||||
| Ending shares: | 198.83 | ||||
| Dividends reinvested/share: | $11.30 | ||||
| Total return: | -25.26% | ||||
| Average annual return: | -5.66% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,472.73 | ||||
The above analysis shows that over this specific five-year period, the investment result worked out poorly, with an annualized rate of return of -5.66%. That would have turned a $10,000 investment made five years ago into $7,472.73 today (as of 03/18/2026). On a total return basis, that is a loss of -25.26% despite the steady stream of dividends.
For context, over roughly the same period the broader U.S. equity market, as represented by large-cap indices, delivered positive annualized returns, highlighting a meaningful opportunity cost for capital deployed in GIS. The result underscores that even high-quality, dividend-paying consumer staples companies are not immune to valuation compression or shifts in investor preference.
Beyond share price change, another component of GIS’s total return these past five years has been the payment by General Mills Inc of $11.30/share in dividends to shareholders. General Mills has a long history of paying quarterly dividends and has periodically increased its payout as earnings and cash flow have grown over time. Automatic reinvestment of those dividends can be a powerful way to compound returns, and for the above calculations we presume that dividends are reinvested into additional shares of stock via a dividend reinvestment plan. (For the purpose of these calculations, the closing price on the ex-dividend date is used).
Reinvestment helped lift the investor’s share count from 166.47 shares at inception to 198.83 shares at the end of the period, partially offsetting the impact of share price weakness. Without dividend reinvestment, the ending account value would have been lower, underlining the role of income in total return for mature consumer staples names.
Based upon the most recent annualized dividend rate of $2.44/share, we calculate that GIS has a current yield of approximately 6.49% on the ending share price shown above. Another interesting datapoint we can examine is “yield on cost” — in other words, expressing the current annualized dividend of $2.44 against the original $60.07/share purchase price. This works out to a yield on cost of 10.80%, meaning that, relative to the initial entry price, the investor is now earning double-digit annual cash income even though the stock itself has delivered a negative total return over this period.
This divergence between yield on cost and total return illustrates a central trade-off for income-focused investors. A rising dividend can significantly improve cash flows to the shareholder, but if the market simultaneously de-rates the stock because of slowing growth, changing interest-rate expectations, or competitive pressures in packaged foods, the headline performance may still disappoint.
For General Mills, the five-year window starting in early 2021 encompassed several cross-currents: volatile input costs and supply-chain challenges, changing consumer demand patterns post-pandemic, a higher interest-rate environment that weighed on defensive, bond-proxy equities, and shifting investor appetite away from traditional staples toward higher-growth segments. All of these dynamics can influence the valuation multiple that investors are willing to pay for a stable but slower-growing earnings stream.
Looking ahead, investors evaluating GIS today will likely focus on the company’s ability to sustain and grow its dividend, manage cost inflation, and reinvigorate organic revenue growth through brand innovation and portfolio management. The relatively elevated current dividend yield may be attractive for income-oriented portfolios, but as the past five years demonstrate, entry valuation and broader market conditions remain critical to realized total return.
One more investment quote to leave you with:
“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.” — Benjamin Graham
For long-horizon investors, that perspective suggests looking beyond recent price weakness to the durability of General Mills’ brands, cash-flow generation, and capital allocation policies while recognizing that even defensive names can experience extended periods of underperformance.
