General Motors (GM) is a leading global automotive company with a rich history of more than a century. The company has been at the forefront of technological advances and has continuously adapted to the changing needs of the market. One of the key factors that have contributed to the success of GM is its shares outstanding.

Shares outstanding refer to the total number of shares of a company that have been authorized, issued, and purchased by investors. As of October 2021, GM has approximately 1.43 billion shares outstanding. Let us take a closer look at the positive benefits of this high number of shares outstanding for General Motors and its shareholders.

1. Improved Liquidity

Having a large number of shares outstanding means that there is more trading volume in the market. This leads to improved liquidity, where investors can easily buy and sell shares without significantly impacting the market price. It also means that there are more opportunities for buyers and sellers to match orders, leading to efficient price discovery.

In the case of GM, with 1.43 billion shares outstanding, the stock is highly liquid, making it attractive to investors. This not only benefits shareholders who can easily exit their positions, but also the company as it can use its stock as a currency for acquisitions and mergers.

2. Lower Volatility

The law of supply and demand dictates that as supply increases, the price of a product or service decreases. This same principle applies to shares outstanding. With a large number of shares outstanding, there is a lower risk of significant price swings in the market due to a few investors buying or selling a large number of shares.

For General Motors and its shareholders, this means a more stable and predictable stock price. This is especially beneficial for long-term investors who are looking for steady returns and do not want to be affected by short-term market fluctuations.

3. Greater Market Cap

The market capitalization of a company is calculated by multiplying the current share price by the number of shares outstanding. With GM having 1.43 billion shares outstanding, its market cap is significantly higher compared to companies with a lower number of shares outstanding. This makes GM one of the largest companies in the automotive industry and increases its visibility and reputation in the financial markets.

A higher market cap also means that GM can access larger pools of capital in the market, giving the company more financial flexibility to pursue growth opportunities and investments.

4. Increased Earnings Per Share (EPS)

Earnings per share (EPS) is a key metric used to measure the profitability of a company. It is calculated by dividing the company's net income by the number of shares outstanding. A higher EPS indicates that a company is generating more profits per share, which is favorable for shareholders.

With a high number of shares outstanding, GM can achieve a higher EPS due to the lower number of shares that need to be divided into the company's earnings. This is an attractive feature for investors as it translates into higher returns on their investment.

5. Potential for Higher Dividend Payments

Dividends are a portion of a company's profits that are distributed to shareholders on a regular basis. GM has a long history of paying dividends to its shareholders, with an average annual dividend yield of 4.2% in the last five years.

With a large number of shares outstanding, GM can generate more profits, which can potentially lead to higher dividend payments. This is a major incentive for investors, especially those seeking regular income from their investments.

In conclusion, the high number of shares outstanding for General Motors brings numerous benefits to the company and its shareholders. It not only increases the liquidity and stability of the stock but also enables the company to access more capital and generate higher earnings and dividends. As the company continues to thrive and grow, its shares outstanding will remain a key factor in its success.