GM BUYS BACK STOCK, LEAVES DIVIDEND ALONE.Byline: Brian Lysaght Bloomberg News General Motors Corp. said it will repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. $2.5 billion in stock, its second big buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program in a year, but disappointed investors by leaving its dividend unchanged. Some analysts and investors were expecting a bigger buyback or another dividend boost because the company is almost $2 billion above its $13 billion target for cash on hand. GM shares fell 1 13/16 to 62-5/8 in trading of 4.38 million shares, compared with the three-month daily average of 2.45 million. The decline erased e·rase tr.v. e·rased, e·ras·ing, e·ras·es 1. a. To remove (something written, for example) by rubbing, wiping, or scraping. b. some of the 15 percent gain GM shares rang up last week. ``I'm not trying to sneeze at sneeze intr.v. sneezed, sneez·ing, sneez·es To expel air forcibly from the mouth and nose in an explosive, spasmodic involuntary action resulting chiefly from irritation of the nasal mucous membrane. n. $2.5 billion, but it's probably not enough to move the market for a company of GM's size,'' said Tom DiBella, vice president of Aeltus Investment Management in Hartford, Conn. The firm recently sold its GM shares and bought Chrysler Corp. stock, DiBella said. GM said it wanted to maintain its dividend at a level that could be maintained through an industry slowdown. Some analysts also said they expect the company to increase its dividend early next year. Still, investors were hoping GM would boost its dividend yield to match that of its U.S. competitors, analysts said. GM's dividend yield is 3.2 percent, compared with Chrysler's 4.4 percent and Ford Motor Co.'s 4.1 percent. ``GM's dividend will be increased sooner or later,'' said Burnham Securities analyst David Healy. ``Maybe the people looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. sooner are disappointed.'' GM's stock had risen 15 percent in the five days ending Friday, to 64 7/16. That was its highest level since 64-3/4 on Feb. 8, 1994. The increase reflected expectations of a dividend hike or buyback, as well as the belief that GM shares have the most to gain in the next six months among Detroit's automakers, whose shares are all relatively cheap. Chrysler, Ford and GM sell at an average of 8.38 times earnings, well below the 23.8 average price-earnings ratio Price-earnings ratio Shows the multiple of earnings at which a stock sells. Determined by dividing current stock price by current earnings per share (adjusted for stock splits). for the Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index 500 stock index. Ford shares rose -5/8 to 41-1/4, while Chrysler gained -1/8 to 36 9/16. |
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