Is Ford Stock a Buy for Its Dividend?
Ford has a complicated history with its dividend but has now paid investors consistently since 2022.
Ford Motor Company's dividend history has been marked by significant fluctuations, influenced by various macroeconomic factors. However, since 2022, the company has maintained a consistent dividend payout. Currently, with Ford's shares trading around $13, the dividend yield stands impressively above 4.5%, surpassing the average yield of the S&P 500. The quarterly cash payout has remained steady at $0.15 since 2022, though it has not grown since then.
Despite this, Ford's financial outlook is showing signs of improvement. The company's management recently raised its full-year guidance, projecting earnings before interest, taxes, depreciation, and amortization (EBIT) between $10 billion and $11 billion, along with an adjusted free cash flow ranging from $6 to $7 billion. This improvement should comfortably cover the dividend with a surplus.
Moreover, Ford possesses substantial liquidity on its balance sheet, which bolsters its financial stability. Although the electric vehicle (EV) unit is experiencing annual losses of approximately $4 billion, the company is strategically shifting its focus towards energy storage, a sector projected to be lucrative in the near future.
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