Is Ford Stock a Buy for Its Dividend?
Despite a well-covered 4.7% forward yield, Ford's dividend history suggests caution.
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.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
