Our analysis is based on comparing Ford Motor Co. with the following peers – Honda Motor Co., Ltd. Sponsored ADR, Toyota Motor Corp. Sponsored ADR, General Motors Company, Tesla Inc, Peugeot SA Sponsored ADR, Nissan Motor Co Ltd Sponsored ADR, Tata Motors Limited Sponsored ADR, Volkswagen AG Sponsored ADR Pfd, Porsche Automobil Holding SE Unsponsored ADR and Bayerische Motoren Werke Aktiengesellschaft Sponsored ADR (HMC-US, TM-US, GM-US, TSLA-US, PUGOY-US, NSANY-US, TTM-US, VLKPY-US, POAHY-US and BMWYY-US).
Ford Motor Co.’s dividend yield is 6.07 percent and its dividend payout is 62.73 percent. This compares to a peer median dividend yield of 2.93 percent and a payout level of 23.38 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 50 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to June 30, 2017), F-US paid a low quality dividend, which represents a yield of 5.60% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were medium quality and 3 were low quality.
- The ending cash balance, with a dividend coverage of 15.14x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to June 30, 2017), F-US paid a low quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 6.93x), investing cash flow (coverage of -8.55x), issuance cash flow (coverage of 2.31x) and twelve-month prior cash (coverage of 15.21x), for a total dividend coverage of 16.14x.
F-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.05x). Thus, the total coverage including share buybacks is 16.19x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||1.48||2.56||3.14||4.19||6.88||6.07|
|Dividend Payout (%)||14.08||22.73||161.29||32.61||52.17||62.73|
A complete list of metrics and analysis is available on the company page.
Ford Motor Co. engages in the manufacture, distribution, and sale of automobiles. It operates through the following segments: Automotive, Financial Services, Ford Smart Mobility, and Central Treasury Operations. The Automotive segment includes the sale of Ford and Lincoln brand vehicles, service parts, and accessories worldwide, together with the associated costs to develop, manufacture, distribute, and service the vehicles, parts, and accessories. The Financial Services segment includes its vehicle-related financing and leasing activities at Ford Motor Credit Company LLC . The Central Treasury Operations segment engages in decision making for investments, risk management activities, and providing financing for the Automotive segment. The Ford Smart Mobility segment designs, builds, grows, and invests in emerging mobility services. The company was founded by Henry Ford on June 16, 1903 and is headquartered in Dearborn, MI.
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