General Motors (GM) just made a bold move to attract investors, raising its quarterly dividend by 25% and launching a massive $6 billion stock buyback program. The news has sparked excitement on Wall Street, with GM stock seeing a notable boost.
What’s Behind the Dividend Increase?
The dividend increase to $0.15 per share brings GM on par with its longtime rival, Ford. The new payout is expected to take effect starting in April 2025, a clear signal that GM is focusing on returning capital to shareholders while navigating industry challenges.
Breaking Down the $6 Billion Buyback
GM’s latest buyback program follows a string of repurchase efforts aimed at reducing outstanding shares and boosting earnings per share (EPS). Here’s what we know:
- $2 billion worth of shares will be repurchased in Q2 2025.
- The remaining $4 billion is set aside for opportunistic buybacks throughout the year.
- GM has already retired over 1 billion shares since 2023.
Market Reaction: Will GM Stock Keep Rising?
Despite GM’s efforts, the stock has been down over 12% this year, with analysts citing concerns over plateauing auto sales and regulatory uncertainties. However, investors are eyeing this buyback and dividend boost as a potential catalyst for a comeback.
What’s Next for GM Investors?
GM’s 2025 earnings guidance remains strong, projecting:
- Net income between $11.2 billion and $12.5 billion.
- Adjusted EPS of $11-$12 per share.
- Free cash flow in the range of $11 billion-$13 billion.
With buybacks in full swing and dividends rising, GM investors are left wondering, is this the perfect time to buy in, or is caution still warranted?
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