General Motors Co. has announced a strategic move to bolster investor confidence by increasing its quarterly dividend by 25% to 15 cents per share. This adjustment aligns GM's dividend with its crosstown rival, Ford Motor Co. In conjunction with the dividend increase, GM is also initiating a substantial $6 billion share repurchase program. The company plans to complete $2 billion in buybacks during the second quarter, executed by financial giants JPMorgan and Barclays.
At the end of last year, GM had fewer than 1 billion shares outstanding. The company has made significant strides in reducing its share count as part of its ongoing efforts to enhance shareholder value. Since 2023, GM has announced $16 billion in stock buyback programs, resulting in the retirement of over 1 billion shares. This latest initiative aims to reward investors amid declining industry sales and profits, despite GM's strong quarterly performance.
"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," – GM CEO Mary Barra
GM CFO Paul Jacobson expressed confidence in the company's financial health and strategic direction. The higher dividend is expected to take effect with the next planned payout, set to be announced in April. Notably, GM will retain $4.3 billion of capacity under its share repurchase authorizations for additional strategic buybacks.
"We feel confident in our business plan, our balance sheet remains strong, and we will be agile if we need to respond to changes in public policy," – Jacobson
Despite these positive developments, GM shares have fallen more than 12% this year. Nonetheless, the company remains optimistic about its future financial performance. GM's guidance for 2025 projects net income attributable to stockholders ranging from $11.2 billion to $12.5 billion. Additionally, adjusted earnings before interest and taxes (EBIT) are anticipated to be between $13.7 billion and $15.7 billion.