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General Motors: 3.8% Yield, Strong 2019 Guidance, Low Valuation And Upside

Published Fri, 08 Feb 2019 10:44:37 -0500 on Seeking Alpha

General Motors (GM) released a convincing set of fourth quarter financials on Wednesday that could get investors all excited about the auto company's shares again. General Motors pulled in billions of free cash flow in the fourth quarter, and has issued a bullish earnings and FCF guidance for 2019 which could potentially lead to a dividend hike. General Motors' shares are undervalued given the strength of the investment proposition, and an investment in GM yields 3.8 percent.
General Motors - Earnings Snapshot
General Motors said on Wednesday that it raked in $38.4 billion in revenues in the quarter ending December which compares against revenues of $37.7 billion in the fourth quarter a year ago, reflecting an increase of 1.8 percent. Analysts expected the auto company to report revenues, on average, of $36.5 billion. In terms of profits, General Motors pulled in $1.43/share in adjusted profits compared to $1.65/share in Q4-2017. However, the analyst consensus was for adjusted profits of $1.22/share, so General Motors delivered a very significant earnings beat.
Here is a Q4-2018 and full-year earnings snapshot for General Motors.

Source: General Motors Investor Presentation
General Motors pulled in billions of dollars in free cash flow in the fourth quarter, which is theoretically available for shareholder distribution and/or additional growth investments.
In Q4-2018, General Motors' total free cash flow hit $4.2 billion, slightly less than a year ago... Read more