General Mills, Inc. (GIS): Among the Cheap Dividend Stocks Being Targeted by Short Sellers

We recently published a list of the 25 Cheap Dividend Stocks Being Targeted by Short Sellers. In this article, we are going to take a look at where General Mills, Inc. (NYSE:GIS) stands against other cheap dividend stocks.

Short sellers — investors who profit from falling stock prices —are seeing a surge in success in 2025. They gained $159 billion in paper profits over just six trading sessions as escalating trade tensions triggered a drop of more than 10% in the US stock market. The sharp market decline, the steepest since 2022, followed President Donald Trump’s announcement of broad global tariffs. According to S3 Partners LLC, the most lucrative short position during this period was against the SPY ETF, which tracks the S&P Index. Traders betting against this fund have racked up over $6.1 billion in paper gains so far this month, based on an April 8 report from S3.

Short sellers could profit from the sharp intraday market swings that wiped out trillions in value, though their actual gains will depend on when they close their positions. S3 data showed that another $46 billion in new short bets were added in April, raising the risk that these bearish positions could intensify the market’s next major move, particularly if the current downturn reverses and pushes major indexes higher. Ihor Dusaniwsky, managing director of predictive analytics at S3, made the following comment:

“Overall, the short side was an extraordinarily profitable trade up and down the market during this correction. 81% of every short trade was profitable and 97% of every dollar shorted was a profitable trade.”

Another report from S&P Dow Jones Indices noted that the average short interest in US stocks rose to 87 basis points over the past month. The biggest jumps were observed in the Automobiles sector, which climbed by 11 basis points, followed by a 10 basis-point increase in the Commercial and Professional Services sector, and a 9 basis-point rise in the Food and Beverage sector.

Although dividend-paying stocks are generally considered more stable than growth stocks, they have still been subject to short selling throughout history. In their 1998 study Who Trades Around the Ex-Dividend Day?, Jennifer Lynch Koski and John T. Scruggs found unusual trading patterns leading up to the ex-dividend date. They suggested that security dealers might short a stock while it still includes the dividend and then repurchase it after the ex-dividend date if they expect the stock’s price drop to be larger than the dividend amount.

Similarly, in their research paper Tax-Induced Trading Around Ex-Dividend Days, Josef Lakonishok and Theo Vermaelen observed unusual levels of short selling on and shortly after the ex-dividend date. They found that this activity tends to be more pronounced in stocks offering higher dividend yields. Their findings suggest that short sellers aim to minimize the typical price drop that often follows the ex-dividend date.

Our Methodology

For this article, we screened for dividend stocks with more than 3% of their float sold short, using data from Yahoo Finance recorded on April 15. From that group, we picked stocks with dividend yields above 3%, as of April 28. Companies offering high dividend yields are often more likely to attract the attention of short sellers. The stocks are ranked in ascending order of their short % of float.

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General Mills, Inc. (NYSE:GIS)

Short % of Float as of April 15: 6.01%

Dividend Yield as of April 28: 4.31%

General Mills, Inc. (NYSE:GIS) is an American multinational manufacturer of branded processed consumer foods sold through retail stores. The stock is down by over 12% since the start of 2025 as rising input costs remained a persistent challenge for the company. In addition, external pressures, including inventory reductions by retailers in key segments, significantly impacted its performance in its latest quarter. Management recognized the ongoing supply chain issues and expressed a commitment to addressing these challenges to help stabilize future sales. Efforts to cut costs and pursue strategic initiatives were highlighted as part of a broader plan to strengthen financial stability in the coming quarters.

In the third quarter of fiscal 2025, General Mills, Inc. (NYSE:GIS) reported mixed results, posting revenue of $4.8 billion, a 5% year-over-year decline. Organic net sales also fell 5%, with around four percentage points of the decline tied to retailer inventory reductions and the anticipated reversal of favorable timing factors from the previous quarter. Despite the difficult environment, the company managed to expand its market share in the Pet, Foodservice, and International segments. Pillsbury refrigerated dough and Totino’s hot snacks categories also delivered stronger performances, helped by increased investments made earlier in the fiscal year.

The company also managed to maintain its cash position. Over the first nine months of fiscal 2025, General Mills, Inc. (NYSE:GIS) generated $2.3 billion in operating cash flow and spent $405 million on capital expenditures. During this period, the company returned $1 billion to shareholders through dividends. Currently, it offers a quarterly dividend of $0.60 per share and has a dividend yield of 4.31%, as of April 28. The company has a solid dividend history of paying regular dividends for 126 years.

Overall, GIS ranks 20th on our list of the dividend stocks targeted by short sellers. While we acknowledge the potential of GIS as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than GIS but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

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Disclosure: None. This article is originally published at Insider Monkey.