Indicating that the carmaker was convinced it had surmounted the largest threats posed by the pandemic and recent economic instability, General Motors Co (GM.N) announced on Friday that it would restart quarterly dividend payments.
Reuters reports that the automaker stopped dividend payments and share repurchases in April 2020 because the global coronavirus epidemic had a negative impact on sales and manufacturing, causing the company to save cash.
The first dividend, at the rate of 9 cents per share on the company’s common stock, will be paid on Sept. 15, 2022, the carmaker said in a statement.
GM Chief Executive Mary Barra cited the company’s electric vehicle (EV) expansion and domestic battery manufacturing infrastructure plans and said, “progress on these key strategic initiatives has improved our visibility and strengthened confidence in our capacity to fund growth while also returning capital to shareholders.”
Cross-town rival Ford Motor Co (F.N) had also said in July it would restore its dividend to a pre-pandemic 15 cents a share.
Shares of GM rose over 2% to $39.36 in premarket trade.
GM shares are down 33% so far this year, even though the company has stuck to optimistic profit outlooks and told investors last month the disruptions to production caused by shortages of semiconductors were easing.
Last year, the company boosted its spending plans on electric and autonomous vehicles to $35 billion through 2025 as it looks to catch up with EV leader Tesla Inc (TSLA.O).
Meanwhile, GM also said it will resume opportunistic share repurchases, adding the board has increased the capacity under the company’s existing repurchase program to $5.0 billion of common stock, up from the $3.3 billion previously remaining under the program.
