I am a dividend yield lover. When I saw GM’s 10% yield earlier this month I was foaming at the mouth. BUT, when I did the math (hmm, $19 stock paying $2 a year in dividends) and considered the fact that this company is in dire straights, I realized that this was a stock to watch, not buy.
I knew that the dividend payout was not sustainable and in fact, any serious investor would agree that to turn this ailing behemoth around, it would need to cut that dividend payout. Yes, saving up to $1 billion a year in dividend payouts would be a start to a more competitive and profitable road for GM.
I only wonder why someone like Krikorian, who is probably GM’s largest shareholder, took so long to ask for this.
Here is the related article.