You may feel that you already know this week’s Stock of the Week. Its cars are a common sight in the US, the UK and the Far East. It is a company that emerged strong and lean from a government bailout…
Cars in General
General Motors Company (GM) is worth investor consideration now that it has moved well beyond the government bailout of 2009. It has become a far more efficient company with a leaner, more focused and higher-quality product line and signs of genuine innovation, such as the upcoming Chevrolet Bolt electric car.
GM now sells vehicles around the world under the brand names Baojun, Buick, Cadillac, Chevrolet, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling. Worries about small competitors, driverless vehicles, ride sharing and other changes in transportation are overdone, giving investors a buying opportunity. Fundamental transportation changes will not happen for years, and when they do, GM will be involved in them. The company is well-positioned to compete in new automotive areas. It recently invested $500 million in the ride-sharing company Lyft and also collaborated with Lyft on a short-term vehicle-rental program called Express Drive.
GM has a huge $10 billion a year in cash flow from operations, which should make its dividend of $1.52/share/yr., recently yielding 4.6%, quite secure. The cash also can be used to buy back stock and reduce debt. Revenue of $152.4 billion in 2015 should rise to $160 billion this year and $165 billion in 2017.
Earnings per share: 2017 est./$6…. 2016 est./$5.85… 2015/$5.02.
This Week’s Expert
Geoff K. Dancey, CFA, is president/portfolio manager at Cutler Capital Management, Worcester, Massachusetts, which manages $300 million. CutlerCapital.com