General Motors

Methodology

General Motors' automotive manufacturing business creates highly cyclical earnings tied to economic conditions, financing availability, and model refresh cycles. The company's truck and SUV focus provides better margins but volume sensitivity. This calculation is challenging given cyclicality and the uncertain transition costs toward electric vehicles—normalized mid-cycle assumptions are essential, while current earnings may reflect peak or trough conditions.

Methodology

GM often shows very low PEG ratios reflecting market skepticism about auto manufacturers' ability to generate returns through cycles and concerns about EV transition costs. The company's low valuation may represent value or appropriately discount capital intensity, cyclicality, and technological disruption risks. Traditional automakers face structural questions about long-term profitability that simple growth multiples don't capture.

Methodology

GM pays a meaningful dividend that appeals to value investors despite cyclical earnings volatility. The company's dividend sustainability depends on maintaining profitability through inevitable downturns and managing EV investments. PEGY is relevant for income-focused investors seeking value in cyclicals, though dividend safety and capital allocation toward EVs should be carefully evaluated given industry transformation challenges.