Ford Motor Company

Ford Motor Company's Ford Focus is now the most popular selling car in China with sales in excess of 403,600 units. Those sales include both the sedan and the hatch back versions of the Focus. In addition, Ford has started selling their newly redesigned 2015 Mustang, the No. 1 selling sports car in the US. Finally, Ford will begin selling, in the next few months, it's all aluminum body F-150 Truck, the number one selling vehicle in the United States for the last decade.

Ford Focus at China's AutoShow

The Company

Ford Motor Company (F) develops, manufactures, distributes, and services vehicles, parts, and accessories worldwide. The company operates through two sectors, Automotive and Financial Services. The Automotive sector offers vehicles primarily under the Ford and Lincoln brand names. It markets cars, utilities, trucks, service parts, and accessories through distributors and dealers in North America, South America, Europe, Turkey, Russia, and the Asia Pacific region. This sector also sells vehicles to dealers for sale to fleet customers, including commercial fleet customers, daily rental car companies, and governments, as well as provides maintenance and repair services. The Financial Services sector offers various automotive financing products to and through automotive dealers. This sector provides financing products, which include retail installment sale contracts for new and used vehicles; leases for new vehicles to retail customers, government entities, daily rental car companies, and fleet customers; wholesale financing that comprise loans to dealers to finance the purchase of vehicle inventory; loans to dealers to finance working capital, purchase dealership real estate, and other dealer vehicle program financing; and other financing products, as well as provides insurance services. Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan. (Daily Chart) (Weekly Chart)

Price $15.43
1yr Target $17.21
Analysts 17
1yr Cap Gain 11.53%
Dividend $0.50
Yield 3.24%
1yr Est Tot Return
14.77%

Market Cap $59.39 Bil
Beta 1.43
EPS (ttm) $1.53
Payout Ratio %
EPS next yr $1.61
P/E 10.08
PEG 0.91
Forward P/E 9.60

Debt/Equity 4.56
ROA 3.00%
ROE 23.30%
ROI 4.00%
Sales $145.24 Bil
Income $6.17 Bil
Profit Margin 4.24%

Revenues, Earnings and Dividends

Like every automobile manufacturer in the US, revenues, earnings and dividends were severely affected by the recession in 2008/2009, as can be seen by the data below. Ford Motor Company was the only US automobile company that didn't ask for nor needed to be bailed out by the US Government during that period. Consequently Ford has recovered more successfully and quicker than any of the other US automakers. 

And while mostly profitable, they continue to struggle with sales and profits (see below). Analysts estimates are finally moving in an upward direction and from an investing point of view, this is probably the best information that can be gathered from this data. The predictability and reliability of those estimates will greatly influence the future price of the stock and the amount of future distributions.  
 

Year
2015 Est
2014 Est
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003

Revenues
$145.95 Bil
$137.04 Bil
$146.91 Bil
$133.55 Bil
$135.60 Bil
$128.95 Bil
$116.28 Bil
$146.27 Bil
$172.45 Bil
$160.12 Bil
$176.89 Bil
$171.65 Bil
$165.06 Bil

Earnings
$1.61
$1.12
$1.76
$1.42
$4.94
$1.66
$0.86
$-6.46
$-1.38
$-6.72
$0.77
$1.73
$0.27

Dividends
$0.60
$0.50
$0.42
$0.25
$0.05
$0.00
$0.00
$0.00
$0.00
$0.15
$0.40
$0.40
$0.40

Payout Ratio
37.26%
44.64%
23.86%
17.60%
1.01%
0.00%
0.00%
N/A
N/A
N/A
51.94%
23.12%
148.14%

Revenue Growth Rate
1 yr = 10.00%
2 yr = 4.08%
3 yr = 4.39%
4 yr = 6.01%
5 yr = 0.08%

Earnings Growth Rate
1 yr = 23.94%
2 yr = -40.32%
3 yr = 1.94%
4 yr = 19.60%
5 yr = N/A

Dividend Growth Rate
1 yr = 68.00%
2 yr = 189.82%
3 yr = N/A
4 yr = N/A
5 yr = N/A

Conclusion

Any investment in Ford Motor Company has to be based more on the "story" than the facts listed above. I believe that Ford is positioning itself to be the uncontested leader in automobile sales in China in the years ahead by concentrating today's sales on the Focus and then as the population's income increases, expanding their product mix with their other models. 

I believe Ford will be able to sell the Mustang for as long as they want and it will continue to increase in sales almost indefinitely. I also believe that the Ford F-150 will eventually be not only the best selling vehicle in the US but the best selling vehicle in the world. 

I also think that despite all the technology going into alternative fuels, Ford will eventually be the manufacturer of volume, along with Toyota. Other companies may have more advanced technologies but Ford has the manufacturing prowess to produce those technologies at the most affordable price.  

As a conservative investor I don't see this security becoming a significant part of my portfolio but I do see it becoming an essential part. Automobiles are a critical part of the modern world and Ford has proven that it can survive and thrive in a world of stiff competition. I have started a position in this company and I will continue to add to that position as funds become available in the future. 

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