NEW YORK (TheStreet) -- General Motors (GM) - Get General Motors Company (GM) Report stock is up by 4.30% to $31.62 in pre-market trading on Wednesday, after the company raised its 2016 earnings guidance and quarterly dividend.
The Detroit-based automaker announced on Wednesday that it expects full-year 2016 earnings between $5.25 per share and $5.75 per share, versus its previous outlook for earnings between $5 per share to $5.50 per share.
Additionally, the company raised its common stock share repurchase program by $4 billion to $9 billion until 2017.
GM raised its quarterly common stock dividend by 6% to 38 cents per share beginning in the 2016 first quarter.
"We made significant progress executing our strategic plan and the results are being demonstrated through our improved earnings," Chairman and CEO Mary Barra said in a statement. "We are making the right investments and taking the actions necessary to lead in the transformation of personal mobility, and positioning the company to continue to drive shareholder value."
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate GENERAL MOTORS CO as a Buy with a ratings score of B. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Automobiles industry and the overall market, GENERAL MOTORS CO's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- Net operating cash flow has significantly increased by 204.04% to $3,308.00 million when compared to the same quarter last year. In addition, GENERAL MOTORS CO has also vastly surpassed the industry average cash flow growth rate of 12.49%.
- GENERAL MOTORS CO's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $1.64 versus $2.35 in the prior year. This year, the market expects an improvement in earnings ($4.79 versus $1.64).
- GM, with its decline in revenue, underperformed when compared the industry average of 9.5%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for GENERAL MOTORS CO is rather low; currently it is at 18.86%. Regardless of GM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.49% trails the industry average.
- You can view the full analysis from the report here: GM