I would like a dividend of 100 euros from this top share: per quarter!

100 euro dividend per quarter from a single top stock? This usually requires a slightly larger allocation. But of course it’s possible, it’s just a matter of math. And possibly also how big your own portfolio is, despite quality and concentration, most income investors are diversified.

However, I have now decided: At General Mills (WKN: 853862), our top stock today, there should be a dividend of 100 euros per share. quarter in the future. What is needed for this? We will figure that out today. And see what I’m waiting for.

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General Mills: 100 euro dividend per quarter

The first step at General Mills and the question of a dividend of 100 euros per quarter is actually relatively simple. In the end, it is about receiving a total payment of 400 euros per year. With a current dividend of 2.8%, 14,285 euros gross would be required. If we wanted to get the value roughly net (with 25% capital gains tax), it would be 17,875 euros based on the current valuation.

Basically, this is a position size that I can definitely imagine for this top stock. The management has shown me that you can keep your own dividend constant over a longer period of time. I also like the defensive business model of a food company with some very, very strong brands. The top stock naturally has strong pricing, especially in the areas of pet food and breakfast cereals. Increasing the quality of my repository is not the wrong approach for me.

General Mills’ overall fundamental valuation isn’t too expensive either, with a price-to-earnings ratio below 20. But has gotten more expensive. Nevertheless, the payout percentage is less than 60%, which also shows me that the American company is structured quite defensively. This quality is enough for me for a quarterly dividend of 100 euros and a higher allocation.

I’m waiting to expand

However, I will wait a bit before expanding my position in General Mills. Although it is a top stock in terms of corporate orientation: for a dividend of 100 euros and such a larger allocation, the valuation is a bit too expensive for me. Or at least not cheap enough.

With a yield of more than 3%, I could consider making an initial purchase. Ideally, and likely larger, I would add to the position again as the dividend yield approaches 3.5%. Whether that will happen soon is another question. But when in doubt, I’m so patient with General Mills stock that I’d wait a few years.

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Vincent owns shares in General Mills. The Motley Fool does not own any of the stocks listed.

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