Ally Financial Raises Dividend 16.7% to $0.35

Ally Financial Inc. raised its quarterly common dividend 16.7% to $0.35 per share from $0.30. The stock trades ex-dividend on November 2, 2026, and the payment is due November 16, 2026, establishing an annual dividend of $1.40 per share.

Why the dividend changed

Ally’s dividend declaration did not give a specific reason for the increase. The timing, however, coincided with evidence of stronger earnings, improving returns and sufficient regulatory capital. That combination provides the clearest context for the board’s decision, although the company did not explicitly link individual operating metrics to the higher payment in its declaration.

Ally reported third-quarter GAAP earnings per share of $1.30, an increase of 10% from a year earlier. Adjusted earnings per share rose 16% to $1.34, while GAAP total net revenue reached $2.3 billion. Chief Executive Michael Rhodes said the quarter showed that Ally was improving returns while strengthening capital and returning it to shareholders. The company also repurchased $178 million of stock during the quarter, placing the dividend increase within a broader capital-return program. Ally’s SEC-filed earnings release provides the results and management commentary.

The balance-sheet position also supported the decision. Ally ended the quarter with a common equity tier 1 ratio of 10.2%. A $6 billion retail auto credit-risk transfer generated about 25 basis points of common equity tier 1 capital when issued, according to the earnings release. Available liquidity was $61.2 billion, and deposits supplied 86% of the company’s funding.

The operating picture was constructive but not without risks. Consumer auto originations reached $12.9 billion, an increase of 10% from a year earlier, while retail auto net charge-offs were 189 basis points. The deposit business recorded a 70th consecutive quarter of customer growth. These results show stronger franchise activity alongside the credit exposure inherent in Ally’s auto-finance business.

Dividend track record

The increase ends an extended period in which the quarterly payment remained at $0.30. The eight most recent payments before the new declaration, from November 1, 2024, through July 31, 2026, were each $0.30.

Annual payments show two distinct phases. The total rose from $0.76 in 2020 to $0.88 in 2021, an increase of 15.8%, and then to $1.20 in 2022, an increase of 36.4%. It remained unchanged at $1.20 in 2023, 2024 and 2025. The consecutive annual growth streak therefore stands at 0 years, despite 9.6% annual growth over five years. The new quarterly rate restarts payment growth, but it does not yet establish a consecutive annual-growth record.

Is the dividend covered?

The dividend consumes 28% of earnings. That ratio indicates that most reported earnings remain after the common dividend, providing room to absorb normal fluctuations in profitability and fund lending, regulatory capital and other corporate needs.

SmarterDividends rates the dividend A with a safety score of 83. That falls within the very safe range of 80-100 and reflects the relatively low earnings payout. The assessment does not eliminate the importance of credit losses and regulatory capital because Ally is a bank holding company with substantial exposure to vehicle finance.

Yield and valuation

At a share price of $38.81, the annual dividend of $1.40 produces a forward yield of 3.61%. That is below the Financial Services sector median forward yield of 5.84%. The increase improves the income stream, but Ally remains a lower-yielding holding than the sector median on this measure. A position of 100 shares generates $140.00 in annual dividend income at the new rate.

The shares have recorded a 5.4% loss over one year and carry a market value of $11.8 billion. SmarterDividends estimates fair value at $65.81, classifying the shares as undervalued with 68% upside to that estimate. The estimate is a valuation reference rather than a forecast of when or whether the market price will close the gap.

What to watch

The immediate dates are November 2, 2026, when the shares trade ex-dividend, and November 16, 2026, when the payment is scheduled. Investors also have an opportunity to hear from Chief Financial Officer Russ Hutchinson at the BancAnalysts Association of Boston Conference on November 5, 2026, according to Ally’s investor-relations calendar.

Subsequent earnings reports will show whether the improvement in earnings, returns and capital persists after the increase. Auto-loan charge-offs, delinquencies, deposit funding and the common equity tier 1 ratio are the main operating and balance-sheet measures tied to dividend capacity.

Capital allocation remains subject to more than operating performance. Ally’s quarterly filing says future dividends and repurchases require board approval and remain subject to Federal Reserve review, capital and liquidity positions, regulatory requirements and alternative uses of capital.