What General Motors Really Wants Investors to Know About Q4

Last year might have seemed like a twisted game of Whack-A-Mole for automotive investors. Problems such as vehicle affordability, growing competition from Chinese autos, navigating tariffs and trade policy changes, rapid development of artificial intelligence (AI) and autonomous vehicles, and supply chain issues all took their turns popping up throughout the year.

Despite those challenges, General Motors (NYSE: GM) just reported a better-than-expected fourth quarter, and it has a major message to investors: It will continue to return significant value to shareholders.

Ending on a strong note

Despite numerous industry challenges, General Motors ended 2025 with momentum, posting fourth-quarter earnings that easily topped Wall Street estimates while announcing a dividend increase and brand new share repurchase authorization. GM bumped its quarterly dividend by three pennies to $0.18 per share, or a dividend yield of about 0.8%, and announced a new $6 billion share repurchase authorization.

"For several years now, GM's strong brands and winning vehicles, as well as our technology-driven services and operating discipline, have delivered consistently strong cash generation. This has allowed us to execute all phases of our capital allocation strategy, from investing in the business and our people, to maintaining a strong balance sheet and returning capital to shareholders," said Mary Barra, General Motors Chair and CEO, in a press release.

Image source: General Motors.

The brief mention of returning capital to shareholders doesn't do the statement justice. While it has sometimes gone overlooked, overshadowed, or completely unnoticed by investors, General Motors has poured billions into share buybacks. In fact, since 2023 General Motors has announced a staggering $22 billion in share buybacks, drastically reducing its shares outstanding and increasing the earnings power of the remaining shares.

GM data by YCharts

The other shoe drops

It was a strong fourth quarter from the Detroit automaker, but there was one dark spot in the report. After rival Ford Motor Company announced it would take a special charge of $19.5 billion to pivot away from EVs in the near term, as the market never materialized in the U.S. as envisioned, many investors waited for a similar announcement from GM.

GM's adjusted earnings, which are the figures estimated by Wall Street, weren't impacted by the $7.2 billion in special charges; however, its net income swung to a $3.3 billion loss during the fourth quarter. The billions in charges were driven by a realignment of EV production capacity and investments to adjust and account for changing consumer demand and in response to policy, trade, and emissions regulations changes.

Despite the $7.2 billion in charges weighing down GM's net income, it was a strong fourth-quarter performance that sent the stock nearly 9% higher last Tuesday. The primary takeaway for investors is that management believes this type of performance to be sustainable, and because of that confidence increased its dividend and share repurchase efforts. GM's commitment to returning value to shareholders is one huge reason to consider a position in the Detroit automaker.

Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.