How to Buy General Motors Company (GM) Stock

Jump straight to it: Start investing in GM stock with Interactive Brokers as your trusted online brokerage.

General Motors (GM) stock has been a major component of stock indexes, including the Dow Jones Industrial Average (DJIA), for almost a century. GM stock is considered a prime example of a “cyclical stock” because its stock price depends on economic growth and closely tracks the business cycle. It is also among the consumer cyclical stocks because its value as a company remains subject to the whims of consumers and the strength of the market for its goods.

How to Buy GM Stock Using a Broker

To buy GM stock using a broker, you need a reputable stock broker that has access to stocks listed on the New York Stock Exchange (NYSE). If you plan to invest in GM stock over the long term and simply want to buy and hold the stock in a broker account, you may want to use a discount broker since you would only pay a modest commission, although you would not get the extras that full service brokers offer. 

Your brokerage account can help you review the firm’s market cap, open a margin account, set up limit orders and much more. Remember, you might also set up a retirement account so that you can be a stockholder on two levels: one in the long-term and one in the short-term.

You can review the market value of the stock at any time, check out insights on the company’s balance sheet and more. If you choose the right broker, you can also work with an investment advisor who can help you make quality choices.

Some online brokers charge inactivity fees on idle accounts and others offer their services free of charge. Keep in mind that how you buy GM stock is just as important as where you trade, so make sure you pick the right broker.

Step 1: Pick a Broker

Knowing what you need in a broker when you buy stocks will make your choice a lot easier. For example, if you need a bank account and a trading account with your broker, or if you want access to other asset classes, some brokers will be able to fill your needs better than others. Check out Benzinga’s guide on how to choose a broker.

Step 2: Try the Trading Platform

Most online brokers provide a free virtual or demo account for you to evaluate their trading platform and practice trading without putting any funds at risk. You might want to open several of these accounts to see which broker’s platform and services best suit your needs. 

Step 3: Fund an Account

After deciding on a broker and getting a trading platform, fund your account. While some brokers let you open an account without funds, each broker has different requirements, funding methods and minimums. Check with your preferred broker to make sure you can meet its requirements.

Step 4: Start Buying GM Stock

Now, determine the price you wish to pay to purchase GM stock. It usually makes sense to watch the GM stock price for several trading sessions to determine your best entry level to buy your stock. Once you know your price level, you can put in a bid for the amount of stock you wish to purchase. 

Best Online Brokers

If you're considering purchasing General Motors stock at this time, take a look at some of our top online brokerage options.

Overview: General Motors and Stock History

Headquartered in Detroit, Michigan, General Motors has been the largest motor vehicle manufacturer during most of the past century, though by 2008, Japanese automaker Toyota Motors surpassed GM as the largest automaker in the world. GM stock was also replaced by Cisco Systems in the DJIA in the same year. GM is trading at $45.98, which is $12.98 above its $33 IPO price in 2010. 

Check out a few fast facts about GM’s timeline through history:

• In the wake of the 2008 financial crisis, the Bush administration announced a plan in December of 2008 to aid GM. Despite the government loan, GM claimed it had $173 billion in debt and filed for Chapter 11 bankruptcy protection. 
• By 2010, GM discontinued its Saturn and Pontiac brands and sold Saab and other foreign assets. When the sales were complete, GM was left with four U.S. divisions: Buick, Cadillac, Chevrolet and GMC. 
• GM decided to once again offer shares to the public once it downsized. On November 17, 2010, GM raised $20.1 billion in an initial public offering (IPO) of stock at $33 per share. 
• On December 15, 2010, GM repurchased all of its preferred stock from the U.S. Treasury for $2.1 billion, and by that year’s end, GM stock closed 2010 at $36.86, which was 10.5% higher than its IPO price. 
• In September of 2019, 48,000 GM employees from the United Autoworkers Union went on strike, costing workers over $1 billion in wages. The strike lasted 6 weeks and cost GM approximately $2 billion in lost production.   
• In March of 2020, the leaders of General Motors met with the heads of Fiat Chrysler and the Ford Motor Company to temporarily close their factories on a rotating basis due to the COVID-19 pandemic. 
• The company also continues to be plagued by recalls. The most recent GM recall announced in December 2020 will affect 840,000 vehicles in the U.S for seat belt failures and suspension problems.  
• GM stock currently trades at the $45.98 per share level, which is $12.98 above the $33 per share price of its 2010 IPO.   
• In June of 2023, GM reached a charging access deal with Tesla, giving its drivers access to over 12,000 Tesla charging stations, saving the automaker $400 million.

Five-year GM stock price chart. Source: Tradingview.

Future Outlook for GM

GM employs 164,000 employees worldwide and had a contraction in sales of about 10% in 2019 with revenue of $137 billion on net income of $6.58 billion. The company’s financials have now started to improve since the COVID-19 pandemic began, and the stock currently trades at roughly 19 times its yearly earnings of $4.82 per share.

Remember, too, that GM Financial finances many purchases at the dealership level. Buyers across North America often depend on the lending side of the business. The lease end could be profitable, but can the business consistently sell used vehicles coming off a lease?

Due to declines in revenue since 2019, GM suspended its dividend payment for much of 2020. While this may have affected income investors, GM stock was trading at the $26 per share level on March 11, 2020, which is when COVID-19 was declared a pandemic. Since then, the stock has gained over 60%, and many top stock analysts continue to give it a “buy” rating. 

Table showing the Trailing Twelve Months (TTM) net earnings per share and Price/Earnings (PE) ratio of GM stock from December 2021 to October 2023. Source: Macrotrends.

Due to the current demand for trucks and other utility vehicles, and considering that the company reported a recent second quarter 2024 EPS of $8.90 versus an analyst consensus of $9.26, GM stock could be an attractive investment for the long term.

Pros of the Stock

Investing in General Motors stock comes with several advantages that make it an appealing option for potential investors.

• Electric vehicle potential: GM is investing heavily in electric vehicles, positioning itself for future growth. This could lead to increased market share and profitability as the automotive industry shifts towards electrification.
• Strong brand recognition: GM owns well-known brands like Chevrolet, Cadillac, and GMC. This brand loyalty can help maintain sales and market position, even in competitive environments.
• Dividend yield: GM has historically offered a competitive dividend yield. This can provide regular income for investors, making it attractive for those seeking both growth and income.

Potential Cons of the Stock

While investing in General Motors stock may seem appealing due to the company's strong brand and market presence, there are several potential downsides to consider that could impact your investment decision.

• Cyclical industry: The automotive industry is highly cyclical and sensitive to economic downturns. During recessions, car sales often decline sharply, which can negatively impact GM's profitability and stock price.
• High debt levels: GM carries significant debt on its balance sheet. This debt burden could limit financial flexibility and increase risk, especially during economic downturns or if interest rates rise.
• Intense competition: The automotive industry is highly competitive, with both traditional and new electric vehicle manufacturers vying for market share. This competition could pressure GM's margins and market position, potentially affecting stock performance.

Is GM Stock for You?

If you have a keen eye for stock market moves, understand economic cycles and have a high financial pain threshold, then GM might be a good stock for you to watch for investment opportunities. 

On the other hand, if you want a stock to buy and forget in an account expecting a large return within several years, GM stock might be a gamble right now due to the unusual global economic conditions during the COVID-19 pandemic that have prompted a notable correction in the business cycle and a sharp rise in U.S. unemployment. 

Trading cyclical stocks definitely takes some expertise, market acumen and knowledge of the sector, so it’s not for everyone. On the brighter side, GM has recently reinstated its stock’s  dividend to provide its investors with some income, which is a plus. Also, if you buy the stock as an investment, you can partially or fully hedge your GM stock holdings using put options, which might make sense in today’s uncertain stock market.

Frequently Asked Questions

Related content:

• How to Buy Coty Inc. (COTY) Stock
• How to Buy Bio-Techne (TECH) Stock