Seeking Alpha

GM declares first dividend in almost six years; +3%

  • General Motors is ahead 3% AH after declaring a quarterly dividend for the first time nearly six years. The $0.30 payout equates to a 3% annualized yield based on today's regular session close of $40.02.
Comments (32)
  • Captain Pike
    , contributor
    Comments (462) | Send Message
     
    That's horsecrap. They should pay the back what they owe to the Treasury 1st and any debt 2nd.
    14 Jan, 05:30 PM Reply Like
  • HackFab
    , contributor
    Comments (950) | Send Message
     
    We ain't gettin' that money back.
    http://bit.ly/1hUP2qt
    14 Jan, 05:47 PM Reply Like
  • Tomm H
    , contributor
    Comments (11) | Send Message
     
    True, and I understand your sentiments. But lets face it, the gov't would just squander it on some other crony capitalism scam. Fairness would dictate that GM pay back the bondholders who got the Royal Shaft in that farce of a bankruptcy.
    14 Jan, 06:07 PM Reply Like
  • HackFab
    , contributor
    Comments (950) | Send Message
     
    Now WHY should they care about the retiree's and pension plans that had $$$ invested in GM paper? Oh, I forget...
    14 Jan, 08:11 PM Reply Like
  • Captain Pike
    , contributor
    Comments (462) | Send Message
     
    @Tom - yes that would come 2nd

     

    @ 1980 below -- what's right is right

     

    and I was for saving them, it was the right thing to do and now chevy has the best line-up in the world, with some others real close.
    14 Jan, 10:00 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3310) | Send Message
     
    It was treasury's decision to take an equity stake, vs a loan, like Ford got for 5.9B

     

    So it's the New GM's fault that the gov't sold too early?

     

    Sorry, stocks are forward looking, not about the past...
    14 Jan, 05:53 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (746) | Send Message
     
    A true voice of reason in the face of the people who curse the darkness only because they can. LOL
    14 Jan, 06:09 PM Reply Like
  • chopchop0
    , contributor
    Comments (2996) | Send Message
     
    "A true voice of reason in the face of the people who curse the darkness only because they can. LOL"

     

    Um, No actually. It was Obama's decision to nationalize GM and make the "bankruptcy" favorable to his UAW union buddies and unfavorable to bondholders and the Treasury (which ultimately trickles down to the American taxpayer), both of whom have lost billions.
    14 Jan, 10:41 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1498) | Send Message
     
    And what were the profits from TARP as well as the bank injections?
    14 Jan, 11:50 PM Reply Like
  • chopchop0
    , contributor
    Comments (2996) | Send Message
     
    It's easy to make profits on anything when you have a Fed that can print money and make that money pay interest at will.
    15 Jan, 12:02 AM Reply Like
  • WisPokerGuy
    , contributor
    Comments (746) | Send Message
     
    It doesn't change the fact that TARP made the government a profit. GM would have too eventually if not for the Treasury's position of exiting GM as quickly as possible. That's not GM's fault.

     

    You know, you can throw out all the politically rhetoric you want, but the fact remains that if the government hadn't stepped in to save GM, Ford and Chrysler probably also would have gone under too. Ford recognized that parts suppliers couldn't survive with just one major automaker. That was why Ford accompanied the other automakers to DC to ask for help in Dec 2008. Without the bailout, the automobile industry would have just been another manufacturing segment of the US economy that would have been ceeded to asian countries. Then you'd just be b*tching about that probably.

     

    Numbers don't lie.
    15 Jan, 12:50 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1498) | Send Message
     
    WisPokerGuy understood the point of my question. Glad to see someone here who isn't always whining :-)
    15 Jan, 12:53 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1498) | Send Message
     
    chopchop, you are quick to point out the billions lost from the GM investment, but quick to dismiss the billions made from bank investments, AIG, TARP, etc.

     

    Sounds like you have an emotional agenda; I recommend you not let that interfere with your investment decision making.
    15 Jan, 12:54 AM Reply Like
  • G-Hammer
    , contributor
    Comments (175) | Send Message
     
    The dividend will be taxed, Govt. will get their money back. How much does Ford owe the Federal Government?
    15 Jan, 02:29 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3310) | Send Message
     
    g-hammer

     

    Ford owes the Gov't $5.9 B

     

    They got their money from the Dept of Energy, vs the others from TARP

     

    http://onforb.es/POf2oi
    15 Jan, 08:11 AM Reply Like
  • User 13043492
    , contributor
    Comment (1) | Send Message
     
    I was forced to close my dealership due to lack of access to capital and the fact I did not have access to monies owed me by GM. like it in principal or not, the bailout was necessary. I am angry at some individuals for not standing up and doing the right thing. I am glad to see GM improving quality, sales, and reputation. There are so many good dedicated people working to improve GM that deserve recognition. Stock value lies with sales and profit expectations. Both are on the rise.
    15 Jan, 06:37 AM Reply Like
  • The_Hammer
    , contributor
    Comments (3775) | Send Message
     
    the problem is not the bailout but how it was done.disclosure own gm stock
    15 Jan, 07:22 AM Reply Like
  • chopchop0
    , contributor
    Comments (2996) | Send Message
     
    Good luck to you. I would never touch GM stock myself personally knowing what has happened before
    15 Jan, 09:04 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1498) | Send Message
     
    Chopchop, I hope that also means you won't be ever owning any financial company that also took bailout money/injection from the US gov?
    15 Jan, 09:52 AM Reply Like
  • chopchop0
    , contributor
    Comments (2996) | Send Message
     
    Correct. Financials are a big wasteland anyways since the recession. The only "financials" I own are MA and V.
    15 Jan, 11:08 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1498) | Send Message
     
    You realize MA and V benefited massively indirectly from the bank bailouts, correct?
    15 Jan, 11:13 AM Reply Like
  • chopchop0
    , contributor
    Comments (2996) | Send Message
     
    Everything did in anyone's portfolio. What's your point? MA and V would have survived without the bailout too, and they'd still be doing gangbusters
    15 Jan, 11:27 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1498) | Send Message
     
    My point is commentators like you who usually refuse to touch anything that had the government's hands in it are usually neck deep in such things, either directly or indirectly.
    15 Jan, 11:41 AM Reply Like
  • Snoopy1
    , contributor
    Comments (1031) | Send Message
     
    Chop,

     

    So if you thought GM was worth $100, you wouldn't buy the stock at $39 just because they were bailed out? Does that make sense to you as a rational investor? GS was also bailed out but I bought it at $97.50 (0.8x tangible BV) because it was clear it should trade at least 1.0x even with more (and deserved) regulation because it should still earn over it's cost of capital over the long term. I'm also a long-time owner of PM despite me thinking smoking is a bad habit and tobacco companies sell death sticks.

     

    Emotion and political biases are not useful in investing. I have a Fox News watching friend who dumped all his mutual funds in July 2009 because he felt Obama the Socialist Kenyan was going to destroy corporate America and the dollar. Needless to say he's regretted that decision.
    15 Jan, 12:54 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3310) | Send Message
     
    Obama may not be a socialist Kenyan, but he is a socialist Keynesian :)

     

    http://bit.ly/1aGyMFi
    15 Jan, 01:00 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1498) | Send Message
     
    Some people can't separate their emotional feelings from rational investment decision making. At least chopchop has plenty of company in the world :-)

     

    Snoopy, what you described in your post is why David Tepper is rich, while many of the buffoons in the world are not.

     

    He went long financials in March 2009, based on the finding that the Treasury's preferred-to-common share price conversion price was actually higher than the current common share price back at the end of Feb 2009. Thank god he didn't let any "political" beliefs stop himself (and his clients) from making money.

     

    The example of your Fox News watching friend made me laugh. Guys like that deserve to eat their losses AND not get potential gains. A double whammy...ouch.
    15 Jan, 01:08 PM Reply Like
  • chopchop0
    , contributor
    Comments (2996) | Send Message
     
    "So if you thought GM was worth $100, you wouldn't buy the stock at $39 just because they were bailed out?"

     

    Has the union problem been fixed? Do they honestly make cars that people want to drive these days? If GM hasn't fixed these underlying issues, is my equity stake going to be at risk again when the going gets tough?

     

    Again, I am sure GM is making strides here, but it certainly is not deserving of my long-term capital in the way a company like BMY, JNJ, V/MA or WMT is.

     

    Good luck to you if you think it's $100 stock. I hope it works out well for you.
    15 Jan, 02:15 PM Reply Like
  • Snoopy1
    , contributor
    Comments (1031) | Send Message
     
    My issue was that you said: " I would never touch GM stock myself personally knowing what has happened before"

     

    That is the definition of being driven by emotion and bias. You're admitting that even if GM was trading at 1/2 your own fair value estimate, you wouldn't consider buying it. That kind of emotional thinking is what provides opportunities for rational investors.
    15 Jan, 03:03 PM Reply Like
  • chopchop0
    , contributor
    Comments (2996) | Send Message
     
    "That is the definition of being driven by emotion and bias. You're admitting that even if GM was trading at 1/2 your own fair value estimate, you wouldn't consider buying it. That kind of emotional thinking is what provides opportunities for rational investors."

     

    That's not the principal reason I would avoid the stock, but it certainly doesn't help sell me on it. I would avoid the stock because I don't think GM has the "moat" that I require a company to have before I invest in it.

     

    The reason I said that was for the people like you who are willing to give the situation a free pass. What has fundamentally changed at GM to prevent such stagnation and decline from happening again?
    15 Jan, 03:22 PM Reply Like
  • Snoopy1
    , contributor
    Comments (1031) | Send Message
     
    I agree that GM (like almost every automaker) has no moat, but I will evaluate it's value based on future earnings and balance sheet. GM seems undervalued and I think it should probably around $50 by mid-2015. Unlike Visa, I do not plan on owning GM long term given the lack of moat as you mention.

     

    If you were the old GM CEO, what would you have done differently - not take the federal money? I do like the new CEO and unlike before, GM is finally making truly competitive cars and think the company should do well for the next few years.
    15 Jan, 04:00 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3310) | Send Message
     
    MA & V are not really "financials"

     

    Company Description

     

    Visa, Inc. is a payments technology company that connects consumers, businesses, banks and governments in more than 200 countries and territories to fast, secure and reliable electronic payments.

     

    Sector: Services

     

    Industry: Business Services

     

    Country: United States

     

    http://bit.ly/1aGd442
    15 Jan, 11:26 AM Reply Like
  • chopchop0
    , contributor
    Comments (2996) | Send Message
     
    ignorant analysts used to call them as such during the 2009 bear market. It was a great time to be buying them :)

     

    I would call them "financial tech"
    15 Jan, 02:16 PM Reply Like
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