Please ensure Javascript is enabled for purposes of website accessibility

Ally Financial Declares a Fresh Dividend

By Eric Volkman – Apr 19, 2020 at 9:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The new payout will be dispensed on May 15.

In contrast to other publicly traded companies that have cut or even suspended their dividends, Ally Financial (ALLY 5.44%) is keeping its payout steady. The company announced Friday, in advance of its latest quarterly results, that it will hand out a fresh disbursement next month. This quarterly dividend of $0.19 per share matches the company's previous one and will be distributed on May 15 to shareholders of record as of May 1.

Since mid-2016, Ally has been a steady and consistent dividend payer, handing out a disbursement every quarter. At the start of this year, it raised that payout by 12% to the present level.

Facade of Ally's Detroit Center.

Image source: Ally Financial.

Although investors reacted well to the latest dividend news -- the bank's shares rose by over 13% on Friday, trouncing the gains of peer banks and the wider stock market  -- there are concerns about its proximate future.

It seems almost inevitable, given the SARS-CoV-2 coronavirus outbreak, that consumer demand for automobiles will soften considerably. Auto loans were the foundation of Ally's business and remain an important segment for the company. (It was formerly GMAC, the lending arm of General Motors.)

Even with the stock's price surge on Friday, its dividend yield is still comparatively generous at 4.9%.

Ally is scheduled to release its latest quarterly results this Monday, April 20, before the market opens. According to data compiled by Yahoo! Finance, analyst estimates vary widely; on average, the 13 prognosticators on record are anticipating a per-share non-GAAP (adjusted) net profit of $0.71, on revenue of roughly $1.6 billion. By comparison, those line items for the company's Q1 of fiscal 2019 were $0.80 and $1.6 billion, respectively.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ally Financial Stock Quote
Ally Financial
$30.82 (5.44%) $1.59
General Motors Company Stock Quote
General Motors Company
$35.80 (8.91%) $2.93

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.