General Motors Boosts Dividend and Announces $6 Billion Share Buyback
In a move aimed at boosting investor confidence and rewarding shareholders, General Motors (GM) announced on Wednesday a 25% increase in its quarterly dividend to 15 cents per share. This dividend hike matches that of its crosstown rival, Ford Motor.
Dividend Increase
The new dividend is a clear indication of GM’s financial strength and commitment to shareholders. With this increase, GM joins Ford in offering a higher dividend yield than the industry average. The automaker’s dividend yield is now approximately 3.2%, compared to the industry average of around 1.5%.
Stock Repurchase Program
In addition to the dividend increase, GM also announced a $6 billion stock repurchase program. This program is expected to reduce the number of outstanding shares by approximately 10%. About $2 billion of the repurchase program is expected to be completed during the second quarter of this year.
Impact on Shareholders
For current shareholders, the dividend increase and share buyback program are positive developments. The dividend hike will result in higher quarterly income for investors, while the share buyback program will increase the value of their existing shares by reducing the number of outstanding shares.
Impact on the Economy
The automotive industry is a significant contributor to the US economy, and GM’s decision to increase its dividend and announce a large stock buyback program is a positive sign for the industry as a whole. This move is likely to boost investor confidence in the sector and potentially lead to further investment in automotive companies.
Conclusion
General Motors’ decision to increase its dividend and announce a large stock buyback program is a clear indication of the company’s financial strength and commitment to its shareholders. This move is likely to boost investor confidence in the automotive industry and potentially lead to further investment in the sector. For current shareholders, the dividend hike and share buyback program are positive developments that will increase their quarterly income and the value of their shares, respectively.
- General Motors increases quarterly dividend by 25% to 15 cents per share
- Announces $6 billion stock repurchase program
- Dividend yield now approximately 3.2%
- Positive sign for the automotive industry
- Likely to boost investor confidence and potentially lead to further investment
