GM Gets Its Motor Running: Carmaker Announces Share Buybacks, Quarterly Dividends, EV Projects And Other Hard-Driving Initiatives

General Motors Company GM announced today (Aug. 19) that it will reinstate its quarterly dividend and increase its share buyback program.

Dividends And Buybacks: The Detroit-based company stated in a press release how the dividend will be reintroduced and how much will be spent on share buybacks.

The press release explained that GM’s board of directors had authorized the reinstatement of the quarterly cash dividend after it was halted in April 2020 due to the uncertainty surrounding the COVID-19 pandemic. The first dividend will be paid on Sept. 15, 2022, to shareholders of record at the close of business on Aug. 31, 2022.

The cash dividend will be paid on the company’s outstanding common stock at a rate of $0.09 per share. That is at about a 76% reduction from the $0.36 per share rate the dividend paid when it was halted. 

GM also announced it will resume share buybacks, but didn’t lay out a specific timeline. The board of directors increased the capacity under the company’s existing program to $5.0 billion of common stock from the previous $3.3 billion. 

"GM's consistently strong earnings, margins and cash flow, our investment-grade balance sheet, and the achievement of several significant milestones in our growth strategy enable us to invest aggressively to accelerate our all-electric future while also supporting the return of excess free cash flow to shareholders, aligned with our long-term capital allocation strategy," said Paul Jacobson, GM's chief financial officer.

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Looking To The Future: Like most automakers, GM is currently making strides in the electric vehicle industry. It has become apparent that EVs are the future and GM has worked on various initiatives to make sure it doesn’t fall behind the competition. 

The company recently launched its GMC Hummer EV pickup and the Cadillac LYRIQ, which are the first vehicles developed on GM’s Ultium EV Platform. The Ultium EV Platform and EV production is the single largest investment in the company’s history and will focus on developing EVs and their batteries. The company invested $7 billion in four Michigan manufacturing sites including a new Ultium Cell LLC plant in Lansing that will create 4,000 new jobs, stated Friday’s press release.

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GM has also successfully executed binding agreements to secure all the battery raw materials needed to scale EV production. The new agreements will allow the company to manufacture more than 1 million units of annual capacity in North America by 2025.

What Will GM Reveal at the Detroit Auto Show?: GM will be showcasing its products at the Detroit Auto Show, which is returning in full force this fall. It will be held from September 15–25 and will feature all of GM’s subsidiaries. The show has not been held since 2019 due to the pandemic. 

While it is unknown what GM will unveil at the show, GM Authority has speculated that physical models of the 2024 Chevy Silverado EV and/or the 2024 Chevy Equinox EV will be revealed at the expo.

Overall, the future remains bright for the legacy automaker as it prepares to expand its EV lineup and further enhance its existing cars. 

GM Price Action: Shares are up 1.94% to $39.46 on Friday, according to Benzinga Pro.

Photo: Courtesy of Amarnath on flickr