General Motors Co. (NYSE:GM) has announced a $0.09 per share dividend to be paid out on December 14, which translates to a modest 1.4% annual yield based on the current stock price. This announcement comes despite the projection of a 2.5% decline in the company's earnings per share (EPS) over the next year. Nonetheless, General Motors has exhibited a strong track record with an impressive 56% annual EPS growth over the last five years, underscoring its efficient reinvestment strategies.
The dividend payout, albeit lower than the industry average, is well-supported by General Motors' robust cash flow and earnings, ensuring comfortable coverage for shareholder distributions. This financial assurance comes even as the automaker anticipates a downturn in earnings.
Historically, General Motors' dividend payments have seen fluctuations, including a notable reduction in the past decade. The annual dividend plummeted from $1.20 in 2013 to $0.36, marking a significant 70% decrease. Despite this volatility and the expected earnings contraction, the company's solid cash flow position allows it to maintain its dividend payments without strain.
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