Why Ford Stock Presents a Promising Investment Opportunity

Saturday, 23 March 2024, 15:02

Despite challenges in the automotive industry, Ford Motor Company offers compelling reasons for investors to consider buying its stock now. Ford's overlooked commercial business, efforts to improve return on invested capital, and strong dividend yield make it an appealing investment option. With a focus on profitability, operational efficiency, and shareholder returns, investing in Ford stock could prove rewarding in the long run.
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Why Ford Stock Presents a Promising Investment Opportunity

Overlooked business

When investors think of Ford, they generally picture large trucks and SUVs. That's fair, especially considering that's what Detroit autos do best. But what many investors overlook is just how lucrative its commercial business is.

  • Ford Blue generated $7.46 billion EBIT.
  • Ford Pro, including Transit vans, generated a surprising $7.22 billion EBIT.
  • Ford Pro has better margins and revenue growth than Ford Blue, indicating significant potential.

Improving ROIC

Management is focusing on improving return on invested capital (ROIC). Despite losses in the electric vehicle business, Ford plans to enhance ROIC from 14% to 20% in the near future.

Strong dividend

Ford's healthy dividend, with a forward yield of almost 5%, and a supplemental dividend of $0.18 per share highlight its commitment to rewarding investors. The company's target for distributions and solid free cash flow bode well for the dividend's stability and growth.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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