Valued at a market cap of $73 billion, Common Motors is among the many largest car corporations on the planet.
The Detroit automaker lately introduced a 20% dividend bump alongside a contemporary $6 billion buyback program after beating Wall Avenue’s fourth-quarter earnings forecasts. GM inventory surged on the information and is now up near 70% over the previous 12 months.
The long-lasting automobile maker has rewarded buyers who caught with the corporate by means of a 12 months of aggressive restructuring and billion-dollar write-downs.
It is a daring transfer that alerts confidence, particularly after Common Motors (GM) took on $7 billion in fees to rightsize its electric-vehicle ambitions and clear up operations in China.
Common Motors raised its dividend payout following robust quarterly outcomes.
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GM inventory: The dividend math that issues
GM raised its quarterly dividend from $0.15 per share to $0.18 per share. Given an annualized payout of $0.72 per share, GM’s annual dividend expense will probably be roughly $660 million this 12 months.
Comparatively, analysts forecast its free money movement at $10.51 billion in 2026, which signifies a payout ratio of simply 15%. GM can simply double its dividend payout and nonetheless has sufficient room to put money into development tasks and decrease steadiness sheet debt.
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In response to information from Tikr.com, GM is projected to lift the annual dividend per share to $0.96 per share by 2029.
Here is what buyers have to find out about GM’s dividend profile:
Key GM Inventory Dividend Metrics:
- New quarterly dividend: $0.18 per share (up from $0.15)
- Annual dividend: $0.72 per share
- Dividend yield: Roughly 0.9%
- Payout ratio: Roughly 15% of FCF
- 3- 12 months Dividend development charge: 26% CAGR
The aggressive share buyback program has been simply as vital because the dividend itself. GM has retired greater than 465 million shares since late 2023, a 35% discount that has improved per-share metrics and pushed the inventory increased.
With one other $6 billion approved for repurchases, the corporate clearly believes its shares stay undervalued regardless of the current run-up.
GM delivers when it counts
Common Motors posted adjusted earnings of $2.51 per share in This autumn, crushing analyst expectations of $2.20.
Income got here in barely gentle at $45.3 billion versus the $45.8 billion Wall Avenue wished, however no one appeared to care a lot about that miss.
The true story is what comes subsequent.
- GM’s 2026 steering requires adjusted earnings between $11 and $13 per share, proper consistent with the analyst consensus of $11.73.
- The corporate expects to generate between $10.3 billion and $11.7 billion in web revenue this 12 months, powered by a return to its goal revenue margins in North America.
- CEO Mary Barra advised buyers the automaker expects North American margins to return to the 8%-10% vary this 12 months, after slipping to six.8% in 2025.
- That is a important milestone after GM absorbed $3.1 billion in tariff prices and took large fees to reduce EV manufacturing.
Barra said:
What’s driving GM’s enterprise
GM’s power stays anchored in North America, the place it continues to dominate full-size vans and SUVs. The corporate held a commanding 60% market share in full-size SUVs final 12 months and posted its highest U.S. market share in a decade.
The automaker additionally proved it may possibly earn cash at cheaper price factors. GM bought over 700,000 autospriced underneath $30,000 in 2025, with fashions just like the Chevrolet Trax and Buick Envista attracting new clients with out eroding margins.
Associated: Common Motors makes harsh determination affecting over 1,000 staff
That is a giant shift from the previous GM playbook of creating all the cash on costly vans and shedding it again on low-cost vehicles.
CFO Paul Jacobson highlighted the corporate’s improved money technology, noting that annual free money movement has jumped from $3 billion to $10 billion over the previous 5 years.
That constant money technology is what’s funding each the dividend will increase and the buybacks.
“We didn’t earn a discount in the market overnight,” Jacobson mentioned.
Navigating the tariff mess
Tariffs stay a headwind, however GM managed them higher than anticipated in 2025. The corporate absorbed$3.1 billion in tariff prices, beneath its preliminary forecast of $3.5 billion to $4.5 billion.
Wanting forward, GM expects one other $3 billion to $4 billion in tariff-related bills this 12 months, assuming the 15% tariff charge on South Korea stays in place.
GM is the second-largest U.S. importer of autos from South Korea, behind Hyundai, and depends closely on Korean crops for entry-level fashions.
The corporate is actively working to offset tariff prices by means of manufacturing strikes, together with plans to provide almost 2 million autos yearly within the U.S. by 2027.
GM hit by EV actuality examine
GM’s $7.6 billion in fees throughout the second half of 2025 marked a painful however crucial reset of its EV ambitions.
The auto heavyweight wrote down property associated to its discontinued BrightDrop electrical van, the conversion of the Orion Meeting plant from EV to ICE manufacturing, and provider contracts that had been not economically viable.
Barra insists GM is not giving up on EVs, simply aligning capability with precise demand quite than regulatory fantasies.
It addedalmost 100,000 new clients by means of EVs final 12 months and plans to proceed bettering profitability by leveraging new battery applied sciences, equivalent to LMR, which ought to cut back cell and pack prices by a number of thousand {dollars}.
However for now, GM is doubling down on what works: worthwhile vans, SUVs, and the software program providers enterprise that is rising quick behind the scenes.
That is excellent news for dividend buyers.
Associated: Common Motors receives remaining grades from analysts forward of This autumn earnings
