General Motors (GM) once again makes a compelling value proposition on the drop. General Motors recently adjusted its earnings guidance on the back of the trade conflict between the United States and China, which in turn has catalyzed a shift in investor sentiment. General Motors, in my opinion, now represents deep value as shares are extremely cheap on a forward-P/E basis and have a compelling risk-reward. An investment in GM comes with an entry yield of 4.7 percent.
General Motors' shares slumped in October as investors went risk-off in light of rising interest rates and surging bond yields. Though General Motors is no longer oversold, I think the drop is a good opportunity to gobble up shares for a dividend portfolio.
Tariff Stand-Off And Reduced Earnings Guidance
The trade war between the U.S. and China weighs on investor sentiment and investors' risk appetite.
The United States and China slapped billions of dollars of new tariffs on each other this year as the trade war gradually escalated over the summer. Just last month, in September, U.S. president Trump imposed new tariffs on Chinese imports to the tune of $200 billion in order to punish the second-largest economy in the world for what the U.S. regards as unfair trade practices. China responded in kind, imposing $60 billion worth of tariffs on U.S. imports.