With the government planning to sell its remaining stake by the end of the year, the epithet "Government Motors" will no longer apply, leaving GM free to pay executives what it wants to.
Jim Cramer likes GM and so do I.
And GM has just received another notable vote of confidence: Hedge fund manager Kyle Bass' Hayman Capital Management, recently put money in GM stock, predicting that as much as $2 billion could go to dividends next year. GM has about 1.39 billion shares outstanding.
For the first nine months of the year, GM had about $4.3 billion in net income, and once the government's remaining 31.1 million shares are sold, it might easily afford a dividend. Ford (F) already carries a 2.4% yield, and its stock is up 28% for the year.
What's powering GM forward is energy. Fracking has created a glut in natural gas and oil prices below those in the rest of the world. With coal dirt cheap, coking and steelmaking are also at an advantage. It's a good time to make more stuff here.
Bears may point to the re-branding of Chevrolet as Opel and Vauxhall in Europe, but that is more of a marketing story than a financial story. With demand slowing in Europe and pointing toward upscale brands, the move makes sense because Opel is seen as a luxury brand.
GM, meanwhile, is doing well in the U.S. In November alone, it sold about 212,000 cars and trucks here, up 14% from a year ago. There were big gains in big-profit trucks such as the GM Tahoe and Sierra, both up over 20%. Sales of the GM Acadia, a crossover SUV built on a mid-size car platform, doubled, and it looks like the next big category.