General Motors Company (GM) Increases Buyback and Dividend, Ups Guidance


It’s been a good early morning for General Motors Company (NYSE:GM) shareholders as the company announced that they will be adding $4 billion to their buyback programs (now $9 billion), while increasing their dividend and providing new guidance for 2016.

Shares of General Motors Company (NYSE:GM) are trading up $1.63 or 5.38% after the announcement, which has pushed the company’s 2016 guidance up to $5.25 to $5.75 a share from $5 to $5.50 a share. Also the company will be raising their quarterly dividend by 6 percent to $0.38 per share.

“Our overall financial outlook for 2016 is based on a strong product launch cadence, growth in adjacent businesses, modest industry growth and aggressive efforts to drive efficiencies,” said Mary Barra, chairman and CEO of General Motors.

The stock increased 0.23% or $0.07 during the last trading session, hitting $30.32. About 76,813 shares traded hands. GM has declined 14.07% since June 9, 2015 and is downtrending. It has underperformed the S&P500 by 6.58%.

From a total of 10 analysts covering General Motors Company (NYSE:GM) stock, 6 rate it a “Buy”, 1 a “Sell”, and 3 a “Hold”. This means that 60% of the ratings are positive. The highest target price is $57 while the lowest target price is $33. The mean of all analyst targets is $42.14 which is 38.98% above today’s ($30.32) stock price. General Motors Company was the topic of 22 analyst reports since July 24, 2015 according to the firm StockzIntelligence Inc. Credit Suisse upgraded shares on January 11 to a “Outperform” rating. Vetr upgraded shares to a”Hold” rating and a $34.50 target share price in their report from an August 11. RBC Capital Markets maintained GM stock in a recent report from October 22 with a “Sector Perform” rating. Finally, S&P Research maintained the stock with a “Strong Buy” rating in a report they issued on a September 18.

The institutional sentiment increased to 1.3 in Q2 2015. It’s up 0.15, from 1.15 in 2015Q2. The ratio improved, as 112 funds sold all their General Motors Company shares they owned while 240 reduced their positions. 93 funds bought stakes while 365 increased their total positions. Institutions now own 1.16 billion shares which is 1.23% less than the previous share count of 1.18 billion in 2015Q2.

Oldfield Partners Llp holds 16.36% of its total portfolio in General Motors Company, equating to 7.59 million shares. Moon Capital Management Lp owns 881,087 shares representing 15.54% of their total US portfolio. Moreover, Appaloosa Management Lp has 13.51% of their total portfolio invested in the company, equating to 12.89 million shares. The New York-based Litespeed Management L.L.C. has a total of 11.29% of their portfolio invested in the stock. Peconic Partners Llc, a New York-based fund reported 2.08 million shares owned.

General Motors Company designs, manufactures and sells cars, trucks and automobile parts across the world. The company has a market cap of $47.07 billion. The Firm also provides automotive financing services through General Motors Financial Company, Inc. (GM Financial). It has 11.09 P/E ratio. The Company’s four automotive divisions include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO) and GM South America (GMSA).