Daniel Miller, The Motley Fool

Sat, May 31, 2025, 9:47 AM4 min read

• General Motors has reduced its shares outstanding dramatically.

• GM is rapidly expanding its EV sales in the U.S. and lowering costs.

• The automaker's restructured business in China brought positive results.

• 10 stocks we like better than General Motors ›

General Motors (NYSE: GM) may be an afterthought when it comes to investments for many, but it may also be the best automotive stock for investors to get their hands on today. Not only does the company thrive with sales of full-size trucks and SUVs, but it's making strong progress with electric vehicles (EVs) and returning value to shareholders at an impressive clip.

Here are three reasons GM might be the next stock you want to buy.

There are two primary ways for companies to return value to shareholders: through a dividend or through share repurchases. In the case of share repurchases, as the company buys back shares and retires them, the earnings per share increases, which drives the value up.

General Motors has been incredible at returning value to shareholders through share buybacks, and you can see how the stock price has responded as the number of shares outstanding declines.

It started in late 2023, when GM announced a significant $10 billion accelerated share repurchase program, which was completed by the fourth quarter. GM approved a further $6 billion buyback in June 2024, and the automaker also increased its dividend by 25%.

The automaker's cash flow is capable of handling such movements. GM generated $14 billion in adjusted automotive free cash flow in 2024 and returned roughly $7.6 billion to shareholders via dividends and buybacks, leaving plenty of liquidity for growth and strategic moves to offset tariff impacts.

When it comes to EVs, it's not really a matter of if, but when they consume the roads globally. It's a tricky thing to balance sales of highly profitable gasoline-powered SUVs and trucks while trying to sell EVs, but General Motors has found a balance. While posting strong financial results driven by its internal combustion engine line, the company also posted EV sales up 94% during the first quarter, grabbing an impressive 10.4% market share in the U.S.

That parks GM in the No. 2 spot for EV sales in the U.S., and marks Chevrolet as the industry's fastest-growing EV brand, driven by the Equinox and Blazer EVs. In even better news, roughly 60% of the EV buyers are trading in a non-GM vehicle, bringing more consumers into the brand.

GM will still need to work diligently on reducing EV costs, especially batteries, for this to become an important chunk of its business, but it is the future of the industry, and GM is well-positioned in the U.S. for now.