We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Time to Ride General Motors (GM) Stock for Higher Highs?
Read MoreHide Full Article
General Motors (GM - Free Report) stock printed another day of fresh 52-week highs after the auto giant announced an additional $6 billion in stock buybacks. Continuing to appease investors, this comes as General Motors launched a $10 billion accelerated share repurchase (ASR) program at the end of last year and increased its dividend by 33% going into 2024.
This is certainly a nod to the confidence General Motors has in its business operations and the ability to generate cash flow but let’s see if it's time to buy GM for more upside.
Recent Performance Overview
Edging towards $50 a share, General Motors' stock has climbed +34% year to date which has largely outperformed Ford’s (F - Free Report) virtually flat performance and Tesla’s (TSLA - Free Report) -32% while also topping the broader indexes with the S&P 500 up +6% for the year and the Nasdaq sitting on +15% gains.
Image Source: Zacks Investment Research
Notably, concerns of slower EV sales have been the knock on Tesla’s stock while in contrast GM has thrived on delivering stronger profits thanks to its diverse lineup of EVs and traditional gasoline vehicles. General Motors has also attributed its recent success to its operating discipline with the company’s free cash flow ballooning to almost $30 billion and setting the stage for the recent stock buybacks and dividend hike.
Image Source: Zacks Investment Research
EPS Outlook & P/E Valuation
Speaking to General Motors' increased profitability, its bottom line expansion is expected to continue with fiscal 2024 earnings now projected to jump 22% to $9.40 per share compared to $7.68 a share last year. Plus, FY25 EPS is projected to rise another 1%.
Image Source: Zacks Investment Research
More intriguing is that GM still trades at just 5X forward earnings which is even beneath Ford’s 6.2X and the industry average of 12.8X while being well below the S&P 500’s 21.7X and Tesla’s 70.4X.
Image Source: Zacks Investment Research
Reinstated Dividend
After reinstating its dividend in 2022 following a suspension during the pandemic, General Motors increased its payout from 3 cents per quarter to 12 cents at the beginning of the year.
Although General Motors' annual dividend yield of 1.01% is still well below Ford’s 4.85% it has crept closer to the S&P 500’s 1.38% average with it being noteworthy that many auto stocks (including Tesla) don’t offer a payout to shareholders as they are focused on growth.
Image Source: Zacks Investment Research
Takeaway
After such an extensive YTD rally, General Motors stock currently lands a Zacks Rank #3 (Hold). To that point, there could be better buying opportunities ahead but longer-term investors should continue to be rewarded from current levels considering General Motors' increased profitability and cheap P/E valuation.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Time to Ride General Motors (GM) Stock for Higher Highs?
General Motors (GM - Free Report) stock printed another day of fresh 52-week highs after the auto giant announced an additional $6 billion in stock buybacks. Continuing to appease investors, this comes as General Motors launched a $10 billion accelerated share repurchase (ASR) program at the end of last year and increased its dividend by 33% going into 2024.
This is certainly a nod to the confidence General Motors has in its business operations and the ability to generate cash flow but let’s see if it's time to buy GM for more upside.
Recent Performance Overview
Edging towards $50 a share, General Motors' stock has climbed +34% year to date which has largely outperformed Ford’s (F - Free Report) virtually flat performance and Tesla’s (TSLA - Free Report) -32% while also topping the broader indexes with the S&P 500 up +6% for the year and the Nasdaq sitting on +15% gains.
Image Source: Zacks Investment Research
Notably, concerns of slower EV sales have been the knock on Tesla’s stock while in contrast GM has thrived on delivering stronger profits thanks to its diverse lineup of EVs and traditional gasoline vehicles. General Motors has also attributed its recent success to its operating discipline with the company’s free cash flow ballooning to almost $30 billion and setting the stage for the recent stock buybacks and dividend hike.
Image Source: Zacks Investment Research
EPS Outlook & P/E Valuation
Speaking to General Motors' increased profitability, its bottom line expansion is expected to continue with fiscal 2024 earnings now projected to jump 22% to $9.40 per share compared to $7.68 a share last year. Plus, FY25 EPS is projected to rise another 1%.
Image Source: Zacks Investment Research
More intriguing is that GM still trades at just 5X forward earnings which is even beneath Ford’s 6.2X and the industry average of 12.8X while being well below the S&P 500’s 21.7X and Tesla’s 70.4X.
Image Source: Zacks Investment Research
Reinstated Dividend
After reinstating its dividend in 2022 following a suspension during the pandemic, General Motors increased its payout from 3 cents per quarter to 12 cents at the beginning of the year.
Although General Motors' annual dividend yield of 1.01% is still well below Ford’s 4.85% it has crept closer to the S&P 500’s 1.38% average with it being noteworthy that many auto stocks (including Tesla) don’t offer a payout to shareholders as they are focused on growth.
Image Source: Zacks Investment Research
Takeaway
After such an extensive YTD rally, General Motors stock currently lands a Zacks Rank #3 (Hold). To that point, there could be better buying opportunities ahead but longer-term investors should continue to be rewarded from current levels considering General Motors' increased profitability and cheap P/E valuation.