General Motors boosts dividend amid declining stock performance

In the United States, General Motors announced on February 26, 2025, that it is increasing its quarterly dividend by 25% to 15 cents per share. This decision aligns GM's dividend with that of its competitor, Ford Motor Company. The raise in dividend comes as part of a broader strategy to reward investors during a period marked by declining industry sales and profits. Additionally, GM unveiled a $6 billion stock repurchase program. Of this total, it is anticipated that $2 billion will be executed in the second quarter of 2025. The company's ongoing capital allocation strategy focuses on achieving a balance between reinvesting in business growth, maintaining a strong balance sheet, and returning capital to shareholders. General Motors CEO Mary Barra emphasized that the company’s solid execution across its strategic pillars is designed to reassure investors in a challenging market. Despite posting strong quarterly results and outpacing Wall Street's expectations, GM’s stock has seen a drop of more than 12% in the current year. As part of its strategy, GM has announced a total of $16 billion in stock buyback programs since 2023, retiring over 400,000 shares. The decision to implement this $6 billion share repurchase program has been based on the company’s capacity for opportunistic buybacks. GM’s Chief Financial Officer, Paul Jacobson, has reiterated the company's confidence in its balance sheet, stating that the company remains committed to returning capital to shareholders as long as it aligns with their financial strategy. Furthermore, GM’s recent guidance for 2025 includes expectations for net income ranging between $11.2 billion and $12.5 billion, along with adjusted earnings before interest and taxes projected between $13.7 billion and $15.7 billion. This guidance indicates a continued focus on profitability amid fluctuating market conditions. GM completed the goal of reducing its outstanding shares to fewer than 1 billion by the end of the previous year, which was a target set earlier by Jacobson. In executing such plans, GM aims to adapt to the rapidly changing automotive landscape, positioning itself for sustainable growth in the face of ongoing challenges.