General Motors Stock Hands $29 Bil Back – Worth a Look

General Motors Stock Hands $29 Bil Back - Worth a Look?

In the last five years, General Motors (GM) stock has returned $29 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let's look at some numbers and compare how this payout power stacks up against the market's biggest capital-return machines.

As it turns out, GM stock has returned the 60th highest amount to shareholders in history.

Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management's confidence in the company's financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.

Top 10 Stocks By Total Shareholder Return

For full ranking, visit Buybacks & Dividends Ranking

What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.

That's the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let's look at some numbers for GM. (see Buy or Sell General Motors Stock for more details)

General Motors Fundamentals

• Revenue Growth: -1.3% LTM and 5.8% last 3-year average.
• Cash Generation: Nearly 1.0% free cash flow margin and 1.6% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for GM was -1.3%.
• Valuation: General Motors stock trades at a P/E multiple of 27.9

*LTM: Last Twelve Months

The table gives a good overview of what you get from GM stock, but what about the risk?

GM Historical Risk

GM isn't immune to big drops. It fell about 32% during the 2018 correction, then took a 55% hit through the COVID pandemic. The inflation shock was even tougher, with a nearly 59% plunge. Even with solid fundamentals, GM has shown it can suffer steep declines when the market turns. Good factors don't erase risk.

But the risk is not limited to major market crashes. Stocks fall even when markets are good - think events like earnings, business updates, and outlook changes. Read GM Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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