Ford – Complete Stock Dividend Analysis | Investing in Stocks


The Ford stock price has plunged 40% over
the last five years and new car sales just hit their lowest in six years last quarter. I’ve found a few reasons though that could
push shares up 20% or more in the next year on top of Ford’s huge 6% dividend yield. I’m doing a complete analysis of Ford shares
today on Let’s Talk Money! Beat debt. Make money. Make your money work for you. Creating the financial future you deserve. Let’s Talk Money. Joseph Hogue with the Let’s Talk Money channel
here on YouTube. I want to send a special shout out to everyone
in the community, thank you for taking a little of your time to be here today. If you’re not part of the community yet,
just click that little red subscribe button. It’s free and you’ll never miss an episode. Those of you in the community know I love
deep value dividend stocks and few are as deep value as Ford Motor Company. With the share price about a tenth of what
it was in 2011, I think there is a lot of upside in one of America’s oldest car companies. In fact, I recently put Ford in a seven-stock
portfolio of must-own dividend names and added it to our 2019 stock market challenge portfolio. In this video, I’m explaining why I think
Ford could turnaround an eight-year losing streak and how high it can go. I’m excited to do this Ford stock analysis,
it’s a level of depth I don’t usually get to on the channel here but that’s where
I’m from. I want to reach out again though and get your
opinion. I could do these in-depth stock analyses all
day long, it’s what I did as a professional analyst and I love doing it. I want your opinion though, what types of
stocks do you want me to look at? We could look at sectors like tech, energy
and healthcare. We could look at stocks in specific strategies
like growth, dividend or value stocks. Let me know in the comments below, what types
of stocks do you want to see covered. Ford has a tempting 5.9% dividend yield but
it’s all been eaten up by a massive stock price loss over the last five years. To be fair, it’s not just Ford but the entire
auto industry with the First Trust Global Auto ETF down 15% over the last five years
against that tragic 39% plunge in Ford shares and a 48% gain in the S&P 500 over the period. But that dividend isn’t the only thing attracting
investors to the shares. This graphic shows the price-to-earnings on
Ford shares over the last three years, trading for as low as six-times earnings and as high
as 10-times. Shares now trade for just 7.8-times the company’s
earnings over the past year but what the chart doesn’t show is that if you go back to 2014,
it was trading for 115-times earnings and even higher than that just after the recession. In fact, shares reached $99 in 2011, nine-times
their current price. Now I’m not saying Ford’s stock price
will ever be anywhere near 115-times earnings again or even half that, but this stock is
definitely in deep value territory. Earnings are expected almost 4% higher over
the next year to $1.35 per share. Revenue on the other hand is expected to remain
sluggish at $144.9 billion, a 1.1% decrease from sales over the last four quarters. Now if we go back to that chart of earnings
estimates for Ford, we see that results have been all over the place. This isn’t like what we saw with Apple where
management does a good job of managing and beating expectations. Ford has missed earnings expectations in three
of the last eight quarters but has also beaten big time in a few of those quarters. So it’s a little harder to estimate what
Fords earnings will be because of that inconsistency but we’re going to talk about that massive
63% earnings beat last quarter and what we can expect over the next year. So any way you slice it, Ford is a value stock
but the problem when you’re investing in these deep value names is timing. Shares have been plunging for the better part
of eight years so why should we think Ford can turn it around now? Will Ford continue to drop or will it be like
shares of Hanesbrands, ticker HBI, the top-performing stock in our 2019 Dividend Portfolio. Hanesbrands had been falling since 2015 with
a 65% slide through last December but has since rebounded more than 50%, helping our
portfolio beat the market. So we need to understand why shares of Ford
and the rest of the automakers have been plunging, why they might turn around and catalysts for
that to happen in 2019. And this market analysis is probably the most
important piece for Ford because that overall auto market is having such a big effect right
now. The Cash for Clunkers and other post-recession
programs led to a surge in new car sales from 2010 through 2015, rising from just 10 million
units to over 18 million new cars sold annually. The problem is that sales in the US have tanked
for the last three years. Sales of cars and light trucks were down 2%
in 2017 and flat last year. JD Power reported that first quarter sales
fell below three million units for the first time in six years. Higher prices have helped moderate that volume
decrease for auto-makers. The average new car price hit a record $33,300
this year but it’s also contributing to the problem. Since wages haven’t really increased, lenders
have had to extend out loan terms to 72 months to keep monthly payments low for buyers. That helped encourage sales but can only go
so far. So you’ve got this massive wave of cars
that were bought just after the recession, these cars are now on the used car market
and weighing on new car sales. There is reason to believe that Ford can come
out of this crisis though and management is making the tough decisions to turn it around. Management has done a decent job of cutting
costs but knows it has to do more. The company has gone from making cars on 27
platforms in 2007 to just 9 today which gives it a lot more flexibility and efficiency. Ford has a solid year planned for product
launches including the Explorer and a new super duty truck later. We’ve already seen some good numbers from
the launch of the Ranger and the company’s most profitable model, the F-150 gets a redesign
next year. The first quarter results were a huge surprise
and started to show that the company’s three-year restructuring program is finally taking effect. Earnings before interest and taxes, so that
EBIT measure, jumped in the first quarter to $2.4 billion from just $1.5 billion last
quarter. A lot of this was on a big move in profitability
from just 3.5% EBIT margin to 6.1% which is a huge move in one quarter. This was all part of a three-year plan to
shave up to $25 billion in costs off the bottom line and full benefits are expected to be
realized through 2022. So even if the overall market for new cars
doesn’t improve, we could see stronger earnings from Ford. For its dividend, Ford generally pays a $0.15
per share payment three quarters of the year and then declares a larger dividend in the
January payment depending on cash flow. On that industry weakness, it didn’t do
that this year and we’d probably be safe to assume it won’t next year either. That’s going to mean a $0.60 per share dividend
for 2019 which is still nearly a 6% yield though it’s quite a bit off the $0.85 per
share paid in 2016. We see here that Ford has been pretty sporadic
with its dividend payout, growing the payment in three years and dropping it in two of the
last five. On that current dividend, the company is paying
out 65% of its net income. That’s a level that probably isn’t sustainable
over a long time. Now I know a lot of analysts point to solid
free cash flow reported but if you remove other cash payments like pension and separations,
the actual cash flow comes in below the $2.4 billion needed to support the dividend. Rock bottom interest rates have helped Ford
and the other auto-makers stay afloat and the company has borrowed a net $47.7 billion
over the last five years. Now this is where it gets a little scary for
investors because the company owes over $100 billion in long-term debt, more than twice
the market value of the shares. The company has $34 billion in cash on the
balance sheet and about $80 billion in other current assets so that’s likely enough to
support the dividend and other cash costs around the restructuring program for a few
years while the company works its way to better profitability. Over the longer-term, there’s reason to
believe that Ford is further along in electric and autonomous vehicles than the market is
giving it credit. The company plans on launching a fully self-driving
commercial truck in 2021 and is developing a Level 3 autopilot system for consumer vehicles. The company is launching a Mustang-inspired
crossover electric with a 300-mile range in 2020 as well as an electric version of the
F-150 soon. Management expects to have a lineup of 40
electric vehicles by 2022. Putting all this together can give us an idea
of where the Ford stock price goes from here and price targets. First though, if you’re likin’ the video
and the information, do me a favor and tap that thumbs up button. Ford is a pretty widely covered stock with
12 ranked analysts offering targets. Itay Michaeli at Citigroup has the lowest
target at $10 per share and a hold rating right around the current price. John Murphy at Merrill Lynch has a buy rating
and the highest target at $14 per share. I think Ford could run to $12 a share and
even higher over the next year barring a big drop in the economy. There’s a good chance earnings surprise
to the upside for $1.50 in profits per share and it would only take an 8-times PE ratio
to get to that $12 target. With this kind of improvement in earnings
and profitability, investors could come back in a big way and push the shares even higher. I’m linking here to a new dividend portfolio
I just created, if you want your dividend stocks to pay your bills, click on the video
to the right. Seven dividend stocks that will put cash in
your pocket every single month. Don’t forget to join the Let’s Talk Money
community by tapping that subscribe button and clicking the bell.

100 Replies to “Ford – Complete Stock Dividend Analysis | Investing in Stocks

  1. New Analysis! After a 200% Return, where do shares of Microsoft go from here? 💰 https://youtu.be/0VBNCfCagqk

  2. This guy puts on a purple shirt with a big bowtie and soft voice with smiles for a friendly Youtube persona, but you can tell he's in shape and that voice will get deep and he will throw people thru a fuckin wall when shit hits the fan. Can def see the Marine in this dude. He's a straight badass don't be fooled! ☺

  3. Youtubers rarely cover transports. As dividend investors should we own a FDX, CSX, or NSC, and if so, which are good picks?

  4. love your videos lots of info that u give a new investor/ could u talk about REITS i have heard of a (NYMT) ticker code and it invests in real estate but there share price is at 6.08 at close on Friday and there payout are at 12% maybe could u evaluate this company please plus i will be investing ford stocks i believe there's a huge upside to them plus that lovely divided

  5. Hello, newish viewer here. To answer your question I prefer dividend talk however you have great info in ever lecture. I would however like to learn more on I could better analyze stocks myself. I'm fairly new to stocks

  6. Thanks for the insight on Ford. I'd be interested on getting your thoughts on QYLD. Its the Nasdaq 100 covered call ETF. It pays a large monthly dividend (10%+ yearly), which seems like a red flag, but I'm trying to understand the total risk. It does suppress some upside due to covered calls getting called, but what other risk am I missing, if any? My financial advisor, said he really couldn't comment on it, and was very vague as to the risk.

  7. Joseph, i have more of a general questions regarding your various stock portfolios. How many different types of portfolios do you have? Meaning how do your organize your stock investments? Dividend stocks, growth stocks, etc. That would be really helpful.

  8. I'm curious about your thoughts on BYND and others like it. Particularly impossible burger. I've seen Beyond meat break into the fast food industry and are serving beyond meat tacos at Del Taco.

  9. Div Growth stocks coverage please. Here’s a ton on my watchlist or own. Pfe, abbv, t, vz, ms, c, aple, o, aapl, k, gis, so, Ed, dis, oxy, bp, xom, vlo, sun, mmp to name some off my list of like 40 to 60. Hope to own 20 to 40 someday I’m at 18 of them. Thanks.

  10. I think one of the major problems with Ford, and also a lot of other large companies is their debt…I've recently made sure most companies I invest in don't have large amounts of debt on their books.

  11. Can you post which custodial accounts allow to invest in individual stocks – looking to make a purchase in Disney for my kids!

  12. Any stocks you would recommend for a dividend growth investor with a longer time horizon? Long DIS, JNJ so far, but would love to add stocks that aren’t too overpriced was thinking about CAT, MMM, WMT.. love your videos, more dividends videos! I would AAPL but i would like to wait for it to hype down a bit to make an entry..

  13. You should do a video on the potential of Disney over the next couple years. Including what would happen if Disney+ flops

  14. Do you think piggy backing the Canadian retirement fund "stocks held by there government for funding there citizens retirement "social security" for those who dont know" is a good idea or is it to well diversified?. I've been thinking about stripping out there U.S. holdings and then seperate by sector and depending on current price and holdings etc… try to discern which stocks have a strong long term outlook and buy them. Also does anyone have any tips on what else to look for that I may have missed?

  15. Mr. Joseph another question if I may. I was looking more closely to LVS reading their 10-K and I noticed they refinanced one of their debts plus they pulled a little extra out of their credit facilities. In the same year they announced they were extending/increasing their buybacks …

    My question is does that present a problem? It would appear from my untrained eye that they financed their buyback with debt …. which seems iffy to me. Am I wrong or what am I missing here?

    Thank you.,

  16. M1 Finance is a great platform unfortunately, your European viewers don't have access to it. I would like to see some vids with your recommendations for Europe, how to start investing which platforms to use for dividends portfolio, fractional shares and how to take advantage of compound interest. Also some deep analysis of value dividend stocks and dividend stocks you would buy now and hold forever. Thank you!

  17. Thank you for the thorough analysis! I’ll have to watch it a couple times to catch all the information.
    You might have covered this question but is there a way to quantify consumer confidence (in the company)? Ford has a history (which seems to have gotten worse in the last decade or so) of passing known poor engineering designs to the consumer. People are even starting to bring up the old Pinto fiasco as examples of how this issue is systemic in the company. Could this be part of the reason for the stock drop since 2011?

    I think Ford will lose market share to specifically Toyota due to lack of confidence in their management and products. (Note to your viewers, I have minimal financial knowledge but I know cars, lol).

  18. Ford is ahead of other autos in reinventing themselves in this changing auto industry. Also they have some MOAT cars like the Mustang and Trucks. In the US people associate FORD with those, unlike some other automakers. Please review REITS and your favorites.

  19. I am currently interested in the canabis sector . I think it will be big . And also E-sports . Both will be big .

  20. Some pot stocks would be good. If you can analyze some early ones like tGod and Crop that would be awesome. Liked & subbed

  21. I'm long on F. Their dividend with a DRIP has increased my position big time. If the share price increases we'll see some serious gains.

  22. Ford (NYSE:F) is being accused in a new lawsuit of falsifying F-150 fuel economy tests, according to Bloomberg.
    I just bought Ford shares yesterday and they will be reporting their quarterly earnings today/tomorrow. Will this affect their share price?

  23. Could you explain, why don't these companies with such high debt just use the dividend money to pay down the debt instead of paying out dividends until their debt is under control?

  24. I believe that Goodyear Tires (GT) is a better investment than F and has a much higher potential for the future: DY 4.14%, Payout Ratio 29%, 5 year DY Growth 63% and with much lower debt level.

  25. I would like to see a video about energy stocks. What companies have a brighter future in energy? Is it possible to predict? What kinds of companies should we stay away from? Love the videos as always.

  26. Excellent video! I’m building a dividend growth portfolio so please cover more deep value dividend stocks so I can get that sweet yield on cost!

  27. Been thinking hard about buying a small 50 share position but ill pass. The outcome that made my decision final is, they did not increase their dividends. Im looking for dividend stocks that grow their dividends over the long run. 6% seems nice but i prefer 8/10/15/20 % yield grow over a decade(s). This is the reason why im not afraid to invest into 1.50% yield dividend stocks now. They grow to a much higher yield in the long run. Thank you for your insights.

  28. Love your show and love you doing an episode on Ford would also be nice if you could do one on General Electric AT&T Johnson & Johnson just a few to name their thank you

  29. I recently bought 20 shares of Ford in my IRA and reinvested the dividends. I plan on buying enough shares so that each dividend will buy a share. Also I owe you an apology; in a previous comment I called you Paul. I'm sorry.

  30. Solid video, in-depth analysis.
    Ford is an interesting play for bonds. For stocks-wise the industry is facing too much difficulties, turn-around would be too difficult to predict, It's a lovely brand just not too much confidence in its stock. For stocks dividend offers a buffer but ideally you want a stock that will deliver decent growth over time, or a significant re-pricing due to some catalyst, or both

  31. They are slowly dying as tesla is growing, dont bett on the horse that can gett you a high divident while there companh is going to crap. Put your money on stocks thats going x10 x20 your money.Ford is dead, getting your dividend while losing 50% value of your investment in -not worth it

  32. I don’t care what reasons you claim the stock will go up, if they don’t stop making shitty, unreliable crap, they will sink.

  33. Stocks intersted in list: AMZN, IBM, AAPL, HBI, ALB, JWN, XOM… to name a few I'll see if you have some of these already analyzed…

  34. What about covering viacom, Pluto TV seems like a great concept. Free cable TV online minus the commercials as well as the merger with CBS and a modest dividend of 3.06. Another one i am sure you've heard of is Symatec that has agreed to sell itself to broadcom if I am not mistaken
    is offering a special dividend in march 2020

  35. Amazing video I been having ford for a while now I got it when it was at 10 but I will keep getting Ford while the price is low

  36. I'd very much like someone to analyze Zynga. I'm bullish on them, because of where their company is going, but I would like to hear other opinions. Even other people in the comments. Any information is welcome.

  37. Ford Electric Mach – E Mustang. Is this going to make any difference? The car specs looks like it is able to compete with Tesla specs. There is a lot of opportunity for Ford, they could also partner with charging stations ( or existing convenient stores like 7-11 or circle K).

  38. it wont be worth it. the automotive boom has passed. there are too many cars in the market, and used cars, and etc.. too many reasons for ford stock not to see any significant growth with in the 10 years.

  39. I have Ford because its the oldest car company in the USA. Still water run deep. I see Ford like a good piece of Americana history. Also Ford is evolving with new technology and soon the Bronco will be reborn.

  40. Reliable company coming out with new ideas. Im a new investor maybe 3 weeks into it and i knew before starting i was gonna take the deep dive into ford.

  41. I've just recently started watching Joseph's YouTube Channel (now a subscriber) and I gotta say I really like it. I also listen to Tai Lopez's channel as well, but I like JH better because he actually provides meaningful information and solid analytics behind his ideas. Very useful information and I hope to start applying a lot of what he teaches in my investment strategy and portfolio. I would love to hear more on dividend and value stocks, I've also started looking into ETF's as well, so a little info on that would be great.

  42. I know Ford has investor pricing if you own at least 100 shares for six months. Could you do a video on the process to accomplish that? Pricing is basically the same as employee pricing.

  43. Here is a suggestion that will benefit your channel. CHK in depth analysis. 2nd largest US natural gas producer became a penny stock, paid a sizable dividend.

  44. First time I come across your videos and I got to say, you are a very good speaker. Calm and composed. Looking forward to seeing more.

  45. It’s at $7 now on feb 27, 2020 I am siting on 300 stocks with a loss. They better get the EV cars out soon are they will he out of business

  46. Ford pays .15 dividend while the stock goes down 10 times that in 2 weeks. Sorry, keep your stock. And the dividend too.

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