Can General Motors Sustain Its 4.3% Dividend?

Can General Motors Sustain Its 4.3% Dividend?

In the last several months, value investors looking for strong dividend yields have seen Detroit-based giant General Motors (NYSE: GM) turn up more frequently in their searches. With a 4.3% dividend yield at current prices, and what looks at first glance to be strong profitability, it seems like GM might be worth some investigation. 

Of course, anytime we see a dividend yield that high, the first question we ask is this: Will the company be able to keep making the payments? Generally speaking, a high dividend yield means that the company's valuation is low. Put another way, it's a sign that investors have turned away from the stock. That in turn can be a sign that the company is in trouble, and if so, it's possible that a dividend cut is on the way.

Is that true of General Motors? Let's take a look.

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Source: Fool.com