SpaceX trades below IPO price as General Mills yields 8.7%
As SpaceX drops below its June IPO price, mature food giant General Mills is drawing attention from value investors with a heavily discounted valuation and an 8.7% total shareholder yield.
SpaceX has slipped below its initial public offering price, trading near $126 on July 17 after debuting at $193 last month. The June IPO raised $75 billion for Elon Musk's space venture, making it a massive market event, but the initial 19% first-day surge has given way to a sharp retreat for the newly public stock.
The rapid reversal in the high-flying technology listing highlights a stark divergence in current market sentiment. While speculative capital chases new listings, traditional dividend-paying consumer staples are trading at historically depressed multiples, offering significant yields to income-focused investors.
General Mills, founded in 1866, currently stands out in this category. The food giant, which owns brands like Cheerios, Betty Crocker, Nature Valley and Old El Paso, offers a straight dividend yield of 6.3%. Factoring in ongoing share repurchases, the total shareholder yield reaches 8.7%.
This level of capital return is notable given the company's unbroken 127-year history of paying dividends. However, the high yield is largely a reflection of the stock's recent underperformance. Shares have fallen an average of 15% annually over the past three years.
That sustained selloff has pushed General Mills into undervalued territory. The stock recently traded at a forward price-to-earnings ratio of 12.5, well below its five-year average of 15. Its price-to-sales ratio sits at 1.1, compared to a five-year average of 1.8.
The third-quarter downturn was driven by specific, largely temporary factors. Management cited retailer inventory adjustments, weather-related supply chain disruptions, brand investments, divestitures, and unfavorable trade expense timing. Notably, executives stated these "timing headwinds [are] expected to become tailwinds in Q4."
CEO Jeff Harmening emphasized a broader structural turnaround is underway. "We are laser focused on increasing our efficiency to help offset elevated inflation, fund our growth investments, and generate stronger earnings and cash flow. ... We're targeting $3 billion in cumulative cost savings by fiscal 2030. ... I'm confident we're on the path to restoring profitable growth and driving shareholder value over the long term," he said.
For investors weighing the volatility of newly listed tech stocks against established businesses, General Mills offers a heavily discounted entry point backed by a century-long track record of returning capital.
