GM to Increase Share Buyback Program and Reinstate Quarterly Dividend

GM to Increase Share Buyback Program and Reinstate Quarterly Dividend

General Motors (NYSE: GM) is set to reinstate a quarterly cash dividend for its shareholders that had previously been cut to save funds amid the coronavirus pandemic. Nevertheless, the dividend will be significantly lower than when it was originally suspended.

According to the automaker, the GM board of directors has approved a dividend on the company’s outstanding common stock at a rate of USD0.09 per share. The rate is approximately 76% lower than the USD0.38 per share being distributed in April of 2020. The first dividend is to be paid to shareholders on September 15. 

“What we’re saying is the business is performing so well, we’re able to fund all these initiatives for growth,” said GM spokesman Jim Cain. “And, our excess cash flow is so strong that we can share some of it directly with shareholders.”

Additionally, the company’s board of directors increased the capacity of its current repurchase program to USD5 Billion of stock from the previous USD3.3 Billion.

“GM is investing more than $35 billion through 2025 to advance our growth plan, including rapidly expanding our electric vehicle portfolio and creating a domestic battery manufacturing infrastructure,” said CEO Mary Barra in a statement. “Progress on these key strategic initiatives has improved our visibility and strengthened confidence in our capacity to fund growth while also returning capital to shareholders.”

General Motors stock has fallen about 34% throughout the year and has a current market cap of USD56.2 Billion.

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