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General Motors Company (NYSE:GM) shares are trading higher in the premarket session on Tuesday.
In a press release, the company said it approved a new share repurchase authorization to repurchase up to $6 billion of its outstanding common stock.
The stock buyback represents more than 10% of General Motors’ current market cap of $54.25 billion.
“The investments GM made in its brands and product portfolio over the last several years, and the company’s operating discipline, are delivering consistently strong revenue growth, margins and free cash flow,” said Paul Jacobson, GM executive vice president and chief financial officer.
In the first quarter, the auto behemoth repurchased $0.3 billion in shares, and the company had said it expects to exhaust the remaining $1.1 billion of the prior authorization before the end of the second quarter.
Check This Out: General Motors Q1 Earnings Surprise: North America Growth, Rising Profit Margin And Annual Guidance Boost
In the first quarter, General Motors also increased its common stock dividend by 33%, from $0.09 to $0.12 per share.
In November last year, the company disclosed a $10 billion accelerated share repurchase while continuing to have approximately $1.4 billion in remaining capacity under its prior share repurchase authorization.
General Motors said the new authorization will allow the company to opportunistically repurchase shares after the completion of the existing reauthorization.
The company held $25.5 billion in cash and equivalents as of March 31, 2024. The adjusted automotive free cash flow was $1.09 billion.
“We are very focused on the profitability of our ICE business, we’re growing and improving the profitability of our EV business and deploying our capital efficiently. This allows us to continue returning cash to shareholders,” Jacobson added.
In another development, CNBC reported last week that General Motors is increasingly using the Costco Wholesale Corporation’s (NASDAQ:COST) Costco Auto Program for EVs as it expands its portfolio from niche vehicles to mass-market segments with vehicles such as the Chevrolet Equinox and Chevrolet Blazer EVs.
“We have a great partnership with Costco, and I’m really bullish on Costco because I like their brand,” the report quoted GM North America President Marissa West.
According to Benzinga Pro, GM stock has gained over 29% in the past year. Investors can gain exposure to the stock via First Trust Nasdaq Transportation ETF (NASDAQ:FTXR) and Invesco S&P 500 Pure Value ETF (NYSE:RPV).
Price Action: GM shares are trading higher by 0.69% to $47.90 premarket at last check Tuesday.
Photo by Jonathan Weiss on Shutterstock
