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GM raises quarterly dividend, initiates $6 billion stock buyback.
By Stella
DETROIT – General Motors is raising its quarterly dividend and initiating a new $6 billion share repurchase program as the company attempts to reward investors amid slowing industry sales and profits.
GM announced Wednesday it is increasing its quarterly dividend by 25% to 15 cents per share — matching that of crosstown rival Ford Motor. The higher dividend is expected to take effect with the company’s next planned payout, scheduled to be announced in April.
Under the $6 billion repurchase plan, $2 billion in buybacks are expected to be completed during the second quarter.
“The GM team’s execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders,” said GM CEO Mary Barra in a news release.
Barra last month suggested the company would continue to return capital to shareholders this year, pending board approval. The automaker has announced $16 billion in stock buyback programs since 2023 that have resulted in the retiring of more than 400,000 shares outstanding, according to FactSet.
Despite such actions and reporting strong quarterly results, including regularly outperforming Wall Street’s expectations, shares of GM are down more than 12% this year.
Wall Street analysts have cited plateauing industry sales, regulatory uncertainty around tariffs and a lack of potential growth opportunities as all weighing on the stock.
GM said the total number of shares ultimately bought back the $2 billion accelerated share repurchase will be based on the average of the daily volume-weighted price of GM’s common stock during the term of the program. The program is being executed by JPMorgan and Barclays.
Outside of the accelerated program, GM will have another $4.3 billion of capacity remaining under its share repurchase authorizations “for additional, opportunistic share repurchases,” the company said. That includes $300 million from its last $6 billion stock buyback program from June.
Source: CNBC
