Iconic car maker raises dividend by 20% after record profit

Valued astatine a marketplace headdress of $73 billion, General Motors is among the largest automobile companies successful the world.

The Detroit automaker precocious announced a 20% dividend bump alongside a caller $6 cardinal buyback program aft beating Wall Street's fourth-quarter net forecasts. GM banal surged connected the quality and is present up adjacent to 70% implicit the past 12 months.

The iconic car shaper has rewarded investors who stuck with the institution done a twelvemonth of aggressive restructuring and billion-dollar write-downs.

It's a bold determination that signals confidence, particularly aft General Motors (GM) took connected $7 cardinal successful charges to rightsize its electric-vehicle ambitions and cleanable up operations successful China.

GM raised its quarterly dividend from $0.15 per stock to $0.18 per share. Given an annualized payout of $0.72 per share, GM’s yearly dividend expense volition beryllium astir $660 million this year.

Comparatively, analysts forecast its free currency travel astatine $10.51 cardinal successful 2026, which indicates a payout ratio of conscionable 15%. GM tin easy treble its dividend payout and inactive has capable country to put successful maturation projects and little equilibrium expanse debt.

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According to information from Tikr.com, GM is projected to rise the yearly dividend per stock to $0.96 per stock by 2029.

Here's what investors request to cognize astir GM's dividend profile:

• New quarterly dividend: $0.18 per stock (up from $0.15)

• Annual dividend: $0.72 per share

• Dividend yield: Approximately 0.9%

• Payout ratio: Roughly 15% of FCF

• 3- twelvemonth Dividend maturation rate: 26% CAGR

The aggressive stock buyback program has been conscionable arsenic important arsenic the dividend itself. GM has retired much than 465 cardinal shares since precocious 2023, a 35% simplification that has improved per-share metrics and pushed the banal higher.

With different $6 cardinal authorized for repurchases, the institution intelligibly believes its shares stay undervalued contempt the caller run-up.

General Motors posted adjusted net of $2.51 per stock successful Q4, crushing analyst expectations of $2.20.

Revenue came successful somewhat light astatine $45.3 cardinal versus the $45.8 cardinal Wall Street wanted, but cipher seemed to attraction overmuch astir that miss.

The existent communicative is what comes next.

• GM's 2026 guidance calls for adjusted net betwixt $11 and $13 per share, close successful enactment with the analyst statement of $11.73.

• The institution expects to make betwixt $10.3 cardinal and $11.7 cardinal successful nett income this year, powered by a instrumentality to its people nett margins successful North America.

• CEO Mary Barra told investors the automaker expects North American margins to instrumentality to the 8%-10% scope this year, aft slipping to 6.8% successful 2025.

• That's a captious milestone aft GM absorbed $3.1 cardinal successful tariff costs and took monolithic charges to scale backmost EV production.