General Motors said on Friday it would reinstate quarterly dividend payouts.
The automaker had suspended dividend payments and share buybacks in April 2020 after the Covid pandemic impacted both sales and production. According to GM the first dividend, at the rate of 9 cents per share on the company’s common stock, will be paid on Sept. 15, 2022.
That’s a roughly 76% reduction from the 38 cents per share when the dividend was suspended in April 2020.
“GM’s consistently strong earnings, margins and cash flow, our investment-grade balance sheet, and the achievement of several significant milestones in our growth strategy enables us to invest aggressively to accelerate our all-electric future while also supporting the return of excess free cash flow to shareholders,” GM chief financial officer Paul Jacobson said in a statement.
The move reflects the automaker’s more optimistic outlook, only weeks after rival Ford also said it would restore its dividend to a pre-pandemic 15 cents a share.
In a release Friday, GM CEO Mary Barra said progress on key strategic initiatives improved the company’s visibility and “strengthened confidence in our capacity to fund growth while also returning capital to shareholders.”
GM shares are down 33% so far this year.