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With stocks hovering around record highs, the S&P 500 Index ($SPX) dividend yield is lingering at 1.32% - a discount to its longer-term yield of 1.83%. And while higher payouts are available for those willing to seek them out, many dividend-paying stocks have struggled to find buyers in the face of stiff competition from bond yields. But with that first interest rate cut now expected as soon as September, it's worth pointing out that some of Wall Street's perennial favorite dividend picks are trading at very attractive valuations for investors in search of reliable passive income.

So, where do we look? Established companies with a history of consistent dividend growth and a solid earnings base are where it's at. That's why we're taking a closer look at General Mills, Inc. (GIS) and Sysco Corporation (SYY). Both of these consumer staples giants offer yields well above the S&P, and they've got solid track records for payouts.

Plus, both stocks look cheap, and analysts are giving them a thumbs-up with consensus "buy" ratings. Can GIS and SYY deliver the perfect blend of steady income and potential capital appreciation in today's economic landscape? Let's dive in and see what these companies are all about.

General Mills, Inc. (GIS): A Consumer Staple Giant with Steady Dividends

General Mills (GIS) is a global food giant, operating in over 100 countries. They focus on creating value-added products through clever marketing, innovative products, and effective sales strategies. This approach has helped them establish a strong presence in the consumer staples sector.

GIS stock has been a laggard over the past year, with a 15.86% decline. Year-to-date, it's down just over 3%, while the Consumer Staples Select Sector Fund (XLP) has gained 7% over the same period.

With a market capitalization of $34.97 billion, GIS sports a forward P/E ratio of just 13.85 - a healthy discount to both its own historical averages, as well as the sector median.

Plus, General Mills has a consistent dividend history, with a current annual dividend yield of 3.83%. They recently announced a 1.7% increase in their quarterly dividend to $0.60 per share, marking their 5th consecutive year of dividend growth.

In its latest earnings report, General Mills reported a 6% decline in fiscal Q4 net sales to $4.7 billion, while full-year net sales decreased by 1% to $19.2 billion. Operating profit remained flat, and adjusted diluted EPS increased by 6% in constant currency. The per-share profit of $1.01 edged out consensus estimates. Looking ahead to fiscal 2025, the company expects flat to 1% growth in organic net sales, adjusted operating profit, and adjusted diluted EPS.

General Mills is executing on its Accelerate strategy, focusing on building brands, innovating, adding scale, and driving sustainable growth. They recently acquired Edgard & Cooper, a leading European premium pet food brand, and the company is ramping up its Olympic promotional efforts for Paris.

Analysts have a “moderate buy” rating on GIS stock, up from a consensus “hold” one month ago. Currently, 4 suggest a “strong buy” and 13 recommend a “hold,” based on a total of 17 analyst ratings. The mean target price is $67.76, implying a potential upside of 7.3% from the current price.

Sysco Corporation (SYY): Leading Food Distributor Dishes Out Dividends

Sysco Corporation (SYY) is a global powerhouse in the food service distribution industry, providing a wide range of products to restaurants, healthcare facilities, educational institutions, and more. With operations in over 90 countries, Sysco is known for its extensive distribution network, diverse product portfolio, and commitment to customer satisfaction.

SYY stock is off about 3% over the past year, and it's down 2% on a YTD basis.

With a market capitalization of $34.67 billion, the food service titan is pretty cheap, with the forward P/E ratio of 16.22 looking attractive on a relative and absolute basis.

Sysco has a long history of paying dividends, with a current annual dividend yield of 2.93%. They recently announced a 1% increase in their quarterly dividend to $0.51 per share, marking the 38th consecutive year of dividend growth. That's good enough for Dividend Aristocrat status.

In their latest earnings report, Sysco booked a 2.7% increase in fiscal Q3 sales to $19.4 billion, which missed estimates. Net income arrived at $424.7 million, or $0.96 per share, on an adjusted basis. This growth was driven by disciplined efforts to manage expenses and deliver strong gross profit margins.

Looking ahead, the company expects organic net sales growth of 0% to 1%, and full-year EPS of $4.20 to $4.40.

Sysco continues to execute its strategic initiatives, including the grand opening of a new distribution center in Northampton, Pennsylvania, and the addition of electric vehicles to its fleet, aligning with its goal to reduce direct emissions by 27.5% by 2030. The company's commitment to sustainability and customer satisfaction positions it well for continued success.

Analysts have a “strong buy" consensus on SYY stock, with a mean target price of $85.33 - implying a potential upside of 19% from the current price.

Conclusion

All things considered, General Mills (GIS) and Sysco (SYY) are two solid dividend stocks worth scooping up while they're trading at a discount. Both companies have a strong track record of paying out consistent dividends, and are currently trading at pretty attractive valuations compared to their peers and historical averages. For investors looking to strike a balance between a juicy yield and a good value, GIS and SYY seem to check both of those boxes right now.

On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.