It's safe to say that General Motors (GM 0.77%) had a pretty great 2024. It grew full-year revenue by 9% and led the U.S. auto market in total, retail, and fleet deliveries. GM grew its total market share and also doubled its electric vehicle (EV) market share over the course of 2024. GM's EV portfolio even became variable profit positive during the fourth quarter.

The good news is that GM just did something in 2025 that should help it stay valuable: share buybacks. Let's explore what this could mean for investors.

Returning value

GM found a way to appease investors fraught with concern about tariffs and money-losing EVs: return value to shareholders. The carmaker announced recently that it has approved a $0.03 per share increase to the dividend, or 25%. It also announced a new $6 billion share repurchase authorization. GM even entered into an accelerated share repurchase program to execute $2 billion of the authorization.

"The GM team's execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders," said Mary Barra, chair and CEO, in a press release.

Returning value to shareholders, especially through buybacks, is one of the things that investors should grow to love about GM. The idea behind share repurchases is relatively simple: Buy back shares at market price, often retiring them, and the earnings per remaining share increase. Companies obviously prefer to buy back their shares when they're undervalued, and GM stock has been trading at paltry price-to-earnings ratios over the past couple of years. Even now, after a 48% gain in 2024, the shares still trade at an incredibly modest price-to-earnings ratio of 7.4.

In fact, since the end of 2023, GM has repurchased roughly $22 billion in shares, and it's part of the driving force behind the automaker's 48% gain during 2024. That $22 billion repurchased within a couple of years is a lot when you consider that GM's market capitalization is roughly $49 billion. In the graphic below, you can see how much of an effect previous repurchases have had.

GM data by YCharts.

Is GM a buy?

General Motors has momentum from its strong 2024, and it doesn't look to be slowing down anytime soon -- although tariffs on Canadian and Mexican imports may eventually have a big say in that matter. In addition to all the recent GM highlights mentioned in the intro, the automaker also reported positive equity income for the fourth quarter, before restructuring costs, in China. That's a big step forward in an incredibly challenging market embroiled in a brutal price war and with thriving domestic brands gobbling up market share.

But one of the growing reasons to own GM is the value returned through massive share buybacks while the stock trades at a paltry price-to-earnings ratio. Also consider that this new share repurchase authorization came with known tariffs looming. That signals that GM remains confident it can weather any storm -- a relief to some investors.

GM has continued to execute both financially and with its product lineup, and as it continues to improve the profitability of its EV lineup, upside remains. In my opinion, GM remains a top, if not the top, automaker to own currently.