General Motors Increases Dividend by 25% and Launches $6 Billion Buyback Program
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Dividend Increase: General Motors announced a 25% increase in its quarterly dividend to $0.15 per share, indicating the company's commitment to returning value to shareholders amid profitable growth, thereby boosting investor confidence.
- Buyback Program Launch: The company also initiated a $6 billion share repurchase program aimed at reducing the number of outstanding shares, which enhances the value of each remaining share and reflects the company's confidence in its stock and future growth prospects.
- Total Yield Advantage: General Motors boasts a total yield of 11.3%, significantly higher than Ford's 5.6%, demonstrating the effectiveness of its share buyback strategy in enhancing shareholder returns and attracting more attention from investors.
- Market Performance: Although GM's dividend yield stands at only 0.71%, its ongoing buyback activities and rising stock price create a positive feedback loop that enhances market recognition of its stock, mitigating the risk of being overlooked by investors.
Analyst Views on GM
Wall Street analysts forecast GM stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for GM is 74.71 USD with a low forecast of 46.00 USD and a high forecast of 100.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
14 Buy
2 Hold
1 Sell
Strong Buy
Current: 80.910
Low
46.00
Averages
74.71
High
100.00
Current: 80.910
Low
46.00
Averages
74.71
High
100.00
About GM
General Motors Company designs, builds and sells trucks, crossovers, cars and automobile parts and provides software-enabled services and subscriptions worldwide. The Company's segments include GMNA, GMI, Cruise and GM Financial. Its GM North America (GMNA) and GM International (GMI) develop, manufacture and/or markets vehicles under the Buick, Cadillac, Chevrolet and GMC brands. The Company provides automotive financing services through its General Motors Financial Company, Inc. (GM Financial) segment. Its Cruise segment is engaged in the development and commercialization of autonomous vehicle technology. Its software-enabled services and subscriptions, including OnStar, its advanced driver-assistance systems (ADAS), including Super Cruise driver assistance technology, and its end-to-end software platform. The Company is also focused on investing in electric vehicles (EVs) and AVs, software-enabled services and subscriptions and new business opportunities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
