The coronavirus outbreak has taken its toll on yet another publicly traded company's cash distribution. General Motors (GM, $21.95) announced early April 27 that it was suspending its dividend – the company's second such move in 12 years.
GM stock, which also was forced to suspend its dividend during the Great Recession, put the pause on its 38-cent-per-share quarterly payout as one of several steps meant to fortify the company's balance sheet. General Motors also extended $3.6 billion of its three-year revolving credit agreement to April 2022, which comes roughly a week after it renewed a $1.95 billion 364-day revolving facility for use by its GM Capital arm.
GM also suspended its share repurchase program and has taken "other significant austerity measures.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic," GM Chief Financial Officer Dhivya Suryadevara said in a statement. "Fortifying our cash position and strengthening our balance sheet will position the company to create value for all our stakeholders through this cycle."
General Motors' announcement comes amid a host of other dividend cuts and suspensions prompted by the COVID-19 outbreak. That includes Ford (F), which halted its dividend in mid-March.
The automotive industry in general is feeling an acute pinch from the coronavirus. During the final week of March, U.S. retail auto sales plunged 59% from J.D. Power's pre-pandemic forecast. The figure has been stabilizing – to 55%, 51% and 48% drops over the next few weeks – but still bodes poorly for automakers.
Meanwhile, General Motors and other automakers' North American plants have been shuttered since late March, with the exception of a few recent reopenings to manufacture ventilators. While they're trying to determine a plan and timetable for reopening for automaking purposes, they'll do so into an uncertain demand climate.
At current prices, GM stock would have yielded 6.9%.
-
How Prepaid Verizon Phone Service Works and When It's a Smart ChoiceExplore the differences between Verizon Prepaid and Verizon Postpaid plans—costs, perks, flexibility, and when going prepaid makes sense.
-
Try This One-Minute Test to Uncover Hidden Health RisksFinding out this little-known fact about your body could reveal your risk of heart disease and more. It's a simple, free check for healthy aging.
-
3M, GM, Blue Chips Lead to the Upside: Stock Market TodayThe S&P 500 followed the Dow Jones Industrial Average into green territory, but the Nasdaq lagged the other indexes because of its tech exposure.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
Stocks Are Down for a Third Straight Day: Stock Market TodayStocks have come a long way in a short time since April and remain near all-time highs as the end of the third quarter approaches.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
-
What Tariffs Mean for Your Sector ExposureNew, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
Dow Jones Industrial Average Nears New Highs: Stock Market TodayThe successor to the first stock market index is getting up there with the S&P 500 and the Nasdaq Composite in all-time-high territory.
