Monday, April 13, 2015

GM raises dividend 20% --- New yield is 3.96%


Today GM announced that it will raise its quarterly dividend from $.30 to $.36 a share. This represents a 20% increase and makes the new yield 3.96%. GM had previously mentioned that it would be raising the dividend, but it was not made official until today.

The dividend will be payable on June 23 for shareholders of record on June 10

Since I currently own 146.13 shares, my yearly dividends will increase by $35.07.


This is obviously great news and it appears that many of the troubles with the ignition recalls are starting to fade away as GM is performing at a high level right now.

I must admit buying shares last year was difficult as the company announced a seemingly endless number of recalls that I believe approached 20 million vehicles. I view myself as a bit of a storm chaser, whether it is buying Target after the security breach, GM during the recall debacle, or most recently buying energy companies amid collapsing oil prices.

This strategy sometimes works well and sometimes does not. Unfortunately deep values rarely appear with pretty bows attached. I find they typically cause a little heartburn and restlessness.

I think lower gas prices could really help the bread and butter products which of course are large trucks and SUVs. GM still looks like a decent value at current prices, but I have a fairly large position already and probably won't add too many more shares.



12 comments:

  1. MDP, good companies with good management can find their way out of short term issues. I think your storm chasing strategy is excellent if the underlying company is sound with firm fundamentals.

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    1. Div4son,

      Storm chasing is fun until you catch a tornado. :-) I like GM here and I think their post bankruptcy strategies are light years ahead of the old GM. This company is much more nimble and less burdened with outrageous legacy costs.

      MDP

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  2. Nice increase on the dividend. Hopefully the stock price goes up along with it, and stays up.

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    1. NNL,

      GM seems to be relatively range bound. I think if gas prices remain low then GM is going to hit some serious homerun quarters. In any event getting a 20% income raise is very nice!

      MDP

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  3. Wow..tahts a big increase. Congrats on the bump. Keep up the great work

    R2R

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    1. R2R,

      Thanks. Hopefully the company continues to perform at a high level. Dividend raises are nice, but ultimately it is about increasing sales and profits.

      MDP

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  4. That's an excellent increase! Congratulations on buying into GM last year when things seemed dire. GM does'nt have a long enough track record of paying and raising dividends for me to be an investor, but every long track record has to start somewhere!

    Cheers
    FerdiS

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    Replies
    1. FerdiS,

      The long term track record is less than impressive, but I think the post bankruptcy GM looks much better than anything in the last 20 years. Hopefully they can continue to perform well.

      MDP

      Delete
  5. That's great news for GM shareholders. Unfortunately, I am not one of them. I hold shares in Ford which has been rangebound for a while now.
    Your purchases like TGT, GM and Energy kinda follows Buffet's mantra - Be fearful when others are greedy and be greedy when others are fearful.

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    1. DGJ,

      I looked at Ford last year, but when comparing the products, I felt GM was building better higher demand and more profitable vehicles. Ford killed GM in 2009-2012, but since then GM seems to really have its act together.

      MDP

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  6. Congrats man. I must apologize however, my new car is a Honda Civic. Nice to see you get something out of those shares!

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    1. DG,

      Definitely. GM has been a pleasant surprise!

      MDP

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