Is FORD a good investment for Dividend Income? In-Depth [50 DataPoint] Analysis of Dividend History, Dividend Rate & Payout Ratio over 25 Years.
This article includes a downloadable Microsoft Excel Sheet with all 25 years of data.
Ford Stock Dividend History
The Ford Motor Company (NYSE: F) has one of the most interesting dividend stocks around. The historic automaker attracts many investors because it offers a high payout ratio and a low stock price.
Ford was offering its shareholders a dividend yield of 7.03%, an annualized payout of 60¢, and a payout ratio of 43.5% on a share price of $8.66 on December 12, 2018. Notably, Ford paid a 15¢ a share dividend on December 3, 2018.
In contrast, General Motors (NYSE: GM); Ford’s biggest direct competitor in the United States, was trading at $34.69 a share on December 12, 2018. For that price, GM offered shareholders a dividend yield of 4.38%, a payout ratio of 25.4%, an annualized payout of $1.52. Specifically, GM is planning a dividend of 38¢ for December 20, 2018.
Steady Stock Dividend Yield at Ford Motor Company
Many investors like Ford because it is the only American automaker that has regularly paid a dividend for 14 of the past 20 years. Since April 1999, Ford has normally offered a dividend yield of 2.77% to 5.72% per share.
The only time that dividend was not available was during and immediately after the 2007-2008 crisis. Ford offered a dividend yield of 5.16% on July 31, 2006; but did not payout again until January 27, 2012, when shareholders received a 0.41% dividend yield.
Therefore, Ford can pay a dividend under normal conditions. It took the most catastrophic financial crisis since the Great Depression of the 1930s to stop Ford from paying a dividend. Ford’s management stopped paying the dividend during the financial crisis, which is responsible.
On the other hand, General Motors only offers investors four years of dividend history. The current GM dividend only began in March 2018. To explain, General Motors stopped paying a dividend when it nearly collapsed during the economic meltdown in 2007 and 2008.
Is the Ford Dividend Reliable?
Historically, there have been some big dividend price and yield fluctuations at Ford.
Ford was offering a 46.08% dividend yield and a $6.37 annualized payout back on October 28, 1998. Those numbers fell to 53¢ and 3.47% on October 28, 1999, but rose to $4.52 and 27.09% on October 30, 2000.
Since then Ford’s dividend yield has stayed in the single digits. The yield reached 7.01% on October 25, 2016, which provided an annualized payout of 78¢. Therefore, Ford can provide sudden and pleasant dividend surprises.
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Is the Dividend at Ford Safe?
Ford’s dividend is safe and reliable, but it is often low. Ford’s most recent dividend payment; which was last paid on December 3, 2018, as 15¢ a share.
The 15¢ dividend rate has been steady since January 28, 2015. Notably, the last Ford dividend increase occurred in January 2015.
In detail, the regular dividend payout increased by 2.5¢ between December 2014 and January 2015. Ford paid a 12.5¢ a share dividend in December 2014 and a 15¢ dividend in January 2014.
The Ford Dividend Spikes Every Year
The good news is that the dividend more than tripled to 55¢ on January 27, 2016, increased by 5¢ to 20¢ on January 18, 2017.
In addition, there was a 13¢ dividend increase in 1st Quarter 2018. To explain, Ford paid a 28¢ dividend in March 2018 and a 15¢ dividend in June 2018.
The bad news is that the dividend-price spikes have been short-lived. For instance, the 20¢ dividend paid in March 2017 fell to 15¢ in June 2017.
Under these circumstances, Ford investors could see another dividend spike in March 2019. On the other hand, the dividend will probably drop back to 15¢ in June 2019, if Ford holds true to form.
Consequently, Ford is a reliable dividend income stock that occasionally rewards shareholders with a bigger payout. The obvious conclusion is that Ford is a reliable dividend stock under normal economic conditions. Despite that Ford’s dividend is very vulnerable to conditions in the American auto market.
Ford Dividend Yield vs Price Chart 25 Year Payment History
How can Ford afford to pay a Steady Dividend?
Ford can afford a generous dividend yield because of the auto industry’s nature.
Automakers like Ford generate a lot of cash from their core businesses. For example, Ford reported an operating cash flow of $5.179 billion, a financing cash flow of $144 million, and a free-cash-flow of $3.198 million for 3rd Quarter 2018.
To clarify, North American automakers like Ford make most of their money by underwriting loans to car buyers. The loan payments provide a steady stream of cash each month.
The steady cash enables Ford to accumulate large stores of cash. For instance, Ford reported $18.562 billion in cash and equivalents and $17.78 billion in short-term investments on September 30, 2018. Thus Ford accumulated $36.342 billion in cash at the end of 3rd Quarter 2018.
Under these conditions, Ford can usually pay a steady dividend. Therefore only the 2007-2008 financial crisis stopped Ford’s dividend.
Ford’s Strong Revenues
Ford can accumulate all that cash because its revenues are very strong. For example, Ford reported revenues of $37.666 billion for 3rd Quarter 2018. Moreover, those revenues were growing at a rate of 3.33%.
From those revenues, Ford earned a gross profit of $3.746 billion, an operating income of $864 million, and a net income of $991 million during 3rd Quarter 2018. Hence, Ford is making money from its vehicle sales.
However, Ford’s revenues will fluctuate throughout the year. For instance, Ford’s revenues were higher in 1st and 2nd Quarters 2018 than 3rd Quarter. For the record, Ford reported revenues of $38.92 billion for 2nd Quarter 2018 and $41.959 billion for 1st Quarter 2018.
Ford Experiences Fluctuating Revenues and High Sales
The nature of the auto business provides the reason Ford’s revenues fluctuate.
For example, sales of Ford’s most popular model; and America’s best-selling vehicle, the F-Series pickup increased by 11.3% during May 2018, Investor’s Business Daily reported. Moreover, sales of a popular model such as the F-series vary dramatically from month to month.
For instance, Ford sold 87,011 F-Series in the United States in March 2018 but 73,104 F-Series in April 2018, Ford Authority calculates. Such differences in sales explain Ford’s unsteady revenues.
On the other hand, Ford is having a superb year in 2018. Ford Authority estimates that Ford sold 821,558 F-Series between January and November 2018. Hence, Ford’s F-Series sales for 2018 exceed its total sales for 2016 which were 820,799.
However, Ford will need to have a great December to beat its record sales record for last year. Notably, Ford sold 896,764 F-Series pickup trucks in the United States in 2017.
The good news for Ford dividend investors is that the management understands this and keeps the dividend rate reasonably low. That means sudden drops in the dividend payout are rare, but the company occasionally makes a bigger payout.
Ford is Smart to Kill Cars
In contrast to trucks, car sales at Ford are falling, they dropped by 13.3% during May 2018, but increases in truck sales nearly covered that loss.
In response to falling demand, Ford will end production of most of its cars in North America in 2018. In detail, the Taurus and Fiesta Sedans will cease North American production next year.
Instead, 90% of Ford’s North American offering will be trucks, sport-utility vehicles (SUVs) and commercial vehicles,” Road and Track reports. Thus Ford will concentrate on the production of the popular vehicles that the consumers want to spend money.
Ford’s decision to kill sedans is good for dividend investors because the company will stop trying to market the vehicles customers do not want. In particular, Auto Trend reports that America’s most popular sedan, the Honda Accord is experiencing a sales slump.
That means Ford’s decision to kill cars is the wise move. Concentrating on the vehicles the consumers actually want can keep revenues high enough to sustain the dividend.
Ford Builds for the Future with Electric and Autonomous Vehicles
Killing cars is not the only way Ford is revamping its vehicle lineup market for a changing market. Notably, the company is making huge investments in electrification and self-driving vehicles.
For example, Ford plans to spend $11 billion put 40 hybrid and fully-electric vehicles on the road by 2018. Reuters reports that 16 of those vehicles will be fully electric.
The first of those electrics the Mach 1 Crossover is expected next year, Plug-In Cars reports. The Mach 1, inspired by Ford’s iconic Mustang muscle cars, will have a 300-mile range.
Importantly, Ford is planning to launch a shuttle and cargo service using its fully autonomous vehicles by 2018. The Verge reports that Ford could market a self-driving SUV (sport-utility vehicle) as early as 2021.
To speed up self-driving vehicle development Ford launched a subsidiary called Ford Autonomous Vehicles (AV) LLC in July. A press release indicates Ford AV will try to monetize Ford’s investments in self-driving driving vehicle technology.
Therefore, Ford is abandoning the vehicles that do not sell and investing heavily in new technology. Hence, Ford is taking the steps to ensure that it will have the resources to pay dividends.
Those who are seeking a low-priced dividends stock should investigate Ford. It offers a low share price, a steady dividend, reliable payouts, and good prospects for revenue growth soon.
Ford’s revenues fell by $3.039 billion during 2nd Quarter 2018. Ford reported quarterly revenues of $41.959 billion on March 31, 2018, that fell to $38.92 billion on June 30, 2018.
Are Automakers Good Dividend Stocks?
The nature of the auto business provides the reason why Ford’s revenues fluctuate.
The reality is that the vast majority of people rarely need to buy a new vehicle. Even though most people need a car for transportation, a new vehicle is a luxury.
As a luxury, a new vehicle is a purchase that most individuals make when times are very good. Any sort of economic uncertainty will make people hesitate about buying a car.
For example, US auto sales fell from 17.2 million in April 2018 to 16.9 million in May 2018. The drop coincided with growing economic uncertainty unleashed by media speculation about a trade war triggered by President Donald J. Trump’s (R-New York) tariff policy.
The good news for Ford dividend investors is that the management understands this and keeps the dividend rate reasonably low. That means sudden drops in the dividend payout are rare, but the company occasionally makes a bigger payout.
Is the Dividend Outlook Good at Ford?
Recent history points to a good dividend outlook at Ford because vehicle sales at the company are growing.
Sales of Ford’s most popular model; and America’s best-selling vehicle, the F-Series pickup increased by 11.3% during May 2018, Investor’s Business Daily reported. Overall retail sales at Ford increased by 3.3% during May 2018.
Car sales at Ford are falling, they dropped by 13.3% during May 2018, but increases in truck sales nearly covered that loss. For the record, truck sales at Ford increased by 9.4% during May 2018.
That means Ford will concentrate its production on the higher profit and better selling models, such as trucks, SUVs, and vans. That can lead to higher cash flows and steady dividends.
Those who are seeking a low-priced dividends stock should investigate Ford. It offers a low share price, a steady dividend, reliable payouts, and good prospects for revenue growth in the near future.
Is Now a Good Time to Buy Ford Stock?
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Ford Stock Price History is it a Good Growth Stock?
Here you can see our 5-year stock chart of the stock price growth for Ford Corp.
Download The Ford Dividend Payout History for your own Analysis
This excel sheet includes Declare Date, Ex-Dividend Date, Record Date, Pay Date, Yield, Dividend & Stock Price for 25 years.
Click Here to Download the Complete Ford F Dividend History In Microsoft Excel Format
