2024-07-14 05:41:42 ET
Summary
- Ford's stock has underperformed, shedding nearly 50% from 2022 highs and lagging behind General Motors.
- Ford offers a robust 4.3% dividend yield, providing an appealing income opportunity for investors.
- Ford plans to utilize its free cash flow primarily for special dividends, with no current plans for stock buybacks, aligning with the Ford family's preference for income over reducing share.
- Strategic cost cuts and a diversified model, including Ford Pro operations, aim to enhance profitability.
- Plans to improve production efficiency and capture demand for trucks and hybrids support potential profitability and returns.
Investment Thesis
Ford Motor Company ( F ) is one stock that has struggled to live up to expectations compared to other stocks in the auto industry. The stock has shed nearly 50% in market value from its 2022 highs of around $26 per share. Likewise, the stock has traded for less than $15 per share over the past two years, returning 15% year to date, compared to General Motors Company's ( GM ) outperformance at 36%, well above the index. This performance differential concerns how these two companies return value to their shareholders, and it's just hammering Ford....
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For further details see:
Ford's Path To Competitive Returns