The board of directors of General Motors Company (NYSE:GM) approved the first distribution of dividends to shareholders since the automaker recovered from bankruptcy in 2009. The board declared a $0.30 per share dividend payable on March 28 to all shareholders of common stock on record as of March 18 this year.
Dan Akerson, chairman and CEO of General Motors Company (NYSE:GM) said, “Today’s General Motors is designing high-quality, world-class vehicles for our customers and delivering consistently solid financial results. The board understands that our investors should share in this success and is pleased to announce a quarterly dividend for our common stockholders.”
General Motors’ strong balance sheet
The automaker delivered profits over the past 15 consecutive quarters until the third quarter of 2013. General Motors Company (NYSE:GM) generated $16.3 billion adjusted automotive cash flow. According to the automaker, its total automotive liquidity was $37.8 billion and its automotive debt was $8.4 billion as of September 30, 2013.
“Our fortress balance sheet, substantial liquidity, consistent earnings and strong cash flow provide the foundation for an ongoing payout. This return to shareholders is consistent with our capital priorities and is an important signal of confidence in our plans for a continuing profitable future,” said Dan Ammann, EVP and chief financial officer at General Motors Company (NYSE:GM).
The automaker’s latest move showed that it listened to the demand of shareholders who had been pushing for a return of capital through stock buyback or dividend payment especially when the United States Treasury exited its position in the company.
Many believed that the decision of General Motors Company (NYSE:GM) to restart a dividend payment would attract more investors to purchase its stock to generate income. The automaker is already paying dividends for its preferred stock.
General Motors Company (NYSE:GM) promoted Ammann as president effective Wednesday, January 15, 2014. The automaker also appointed Chuck Stevens to take over Ammann’s previous position as EVP and chief financial officer. He will be responsible for overseeing accounting and financial operations of the company globally. He will report to GM CEO Mary Barra starting today.