Hi
everyone,
A week ago I added Ford Motor Company (F) to my slowly growing portfolio that I started at the end of July 2014. I’m partial to Ford, as an owner of Ford vehicles and a previous shareholder. As I stated in my blog post regarding my Ford buy, I sold my Ford shares in 2013 for a 90% profit. Not too shabby, but I've recently switched my strategy to long term investing, as do my fellow bloggers I religiously follow. Since my ‘awakening,’ I’m focused on generating dividend income and long term capital accumulation to pad my retirement and my wallet! I’m all about the divvies now!! I wish I would have started in my teens or early twenties, but alas, I guess it’s never too late, so I started this journey in my early 30s.
My investment strategy has shifted a great deal, as I am now a more pure buy and hold guy. I do not necessarily over concern myself with the ongoing dips we see in the short term, but rather see it as a golden buy opportunity. Who doesn't want to buy things cheaper? Anyways, I try not to distract myself with one particular bad quarter or some bad announcement that sends a stock tumbling, but rather look at it as something I will own for twenty years plus.
Ford Motor Company has been hit very…. very hard lately. Ford is down around 20% over the past 3 months. It last closed at $13.62, which is near its 52 week lows and significantly off its 52 week high of $18.12. During the market today, it actually went well under its 52 week low but rose back up prior to the closing bell.
Ford Motor Company is not simply a car maker, but rather has a pretty robust financial side to the business with its Financial Services segment, which sets it apart from its peers. The company is described, per Google Finance, as:
Ford Motor Company (Ford) is a producer of automobiles. The Company together with its subsidiaries is engaged in other businesses, including financing vehicles. The Company operates in two segments: Automotive and Financial Services. Automotive includes Ford North America, Ford South America, Ford Europe, and Ford Asia Pacific Africa region. Financial services include Ford Motor Credit Company and Other Financial Service. The Company manufactures or distributes automobiles across six continents. Its automotive brands include Ford and Lincoln. Other Financial Services includes a range of businesses, including holding companies and real estate. Effective September 26, 2013, Ford Motor Company acquired Livio, a developer of software.
While the Ford Motor Company may not be the prototypical dividend stock in your portfolio, it deserves a second look, especially for an established portfolio that may need some more diversity. Ford is currently trading at a pretty decent valuation with a P/E of 8.37, along with a starting yield of 3.67%. Ford reestablished its dividend in 2012, subsequently raising the dividend the following two years. In this regard, the dividend is not necessarily safe, as Ford cut its dividend from 2006 to 2012 during the great recession and aftermath. Overall, Ford does have its concerns, and it’s not the blue chip dividend stock it should be. For example, Ford has recently been downgraded by the likes of Morgan Stanley and Goldman Sachs for the short term with a target price of $17. However, as I mentioned above, I’m not concerned with the short term and feel the company can continually be profitable over the long term. European sales have been increasing, as Ford sales rose over 14% and 12% respectively in the past two months. Ford will be releasing its new generation of F-150s soon, along with the sixth generation of the Ford Mustang. These should add some sales growth in the U.S. and around the world.
Ford will continue to be a part of my portfolio over the long haul, unless it cuts its dividend. I do not plan to make it a major holding, rather it will be relatively small position overall. I plan on buying more shares soon, as I’m hoping it continues to decline some more and I can average down on my current cost basis of $14.50. I would like to build my position to around 150 shares and then slowly accumulate additional shares with a DRIP.
Any others with F as a part of their portfolios?
A week ago I added Ford Motor Company (F) to my slowly growing portfolio that I started at the end of July 2014. I’m partial to Ford, as an owner of Ford vehicles and a previous shareholder. As I stated in my blog post regarding my Ford buy, I sold my Ford shares in 2013 for a 90% profit. Not too shabby, but I've recently switched my strategy to long term investing, as do my fellow bloggers I religiously follow. Since my ‘awakening,’ I’m focused on generating dividend income and long term capital accumulation to pad my retirement and my wallet! I’m all about the divvies now!! I wish I would have started in my teens or early twenties, but alas, I guess it’s never too late, so I started this journey in my early 30s.
My investment strategy has shifted a great deal, as I am now a more pure buy and hold guy. I do not necessarily over concern myself with the ongoing dips we see in the short term, but rather see it as a golden buy opportunity. Who doesn't want to buy things cheaper? Anyways, I try not to distract myself with one particular bad quarter or some bad announcement that sends a stock tumbling, but rather look at it as something I will own for twenty years plus.
Ford Motor Company has been hit very…. very hard lately. Ford is down around 20% over the past 3 months. It last closed at $13.62, which is near its 52 week lows and significantly off its 52 week high of $18.12. During the market today, it actually went well under its 52 week low but rose back up prior to the closing bell.
Ford Motor Company is not simply a car maker, but rather has a pretty robust financial side to the business with its Financial Services segment, which sets it apart from its peers. The company is described, per Google Finance, as:
Ford Motor Company (Ford) is a producer of automobiles. The Company together with its subsidiaries is engaged in other businesses, including financing vehicles. The Company operates in two segments: Automotive and Financial Services. Automotive includes Ford North America, Ford South America, Ford Europe, and Ford Asia Pacific Africa region. Financial services include Ford Motor Credit Company and Other Financial Service. The Company manufactures or distributes automobiles across six continents. Its automotive brands include Ford and Lincoln. Other Financial Services includes a range of businesses, including holding companies and real estate. Effective September 26, 2013, Ford Motor Company acquired Livio, a developer of software.
While the Ford Motor Company may not be the prototypical dividend stock in your portfolio, it deserves a second look, especially for an established portfolio that may need some more diversity. Ford is currently trading at a pretty decent valuation with a P/E of 8.37, along with a starting yield of 3.67%. Ford reestablished its dividend in 2012, subsequently raising the dividend the following two years. In this regard, the dividend is not necessarily safe, as Ford cut its dividend from 2006 to 2012 during the great recession and aftermath. Overall, Ford does have its concerns, and it’s not the blue chip dividend stock it should be. For example, Ford has recently been downgraded by the likes of Morgan Stanley and Goldman Sachs for the short term with a target price of $17. However, as I mentioned above, I’m not concerned with the short term and feel the company can continually be profitable over the long term. European sales have been increasing, as Ford sales rose over 14% and 12% respectively in the past two months. Ford will be releasing its new generation of F-150s soon, along with the sixth generation of the Ford Mustang. These should add some sales growth in the U.S. and around the world.
Ford will continue to be a part of my portfolio over the long haul, unless it cuts its dividend. I do not plan to make it a major holding, rather it will be relatively small position overall. I plan on buying more shares soon, as I’m hoping it continues to decline some more and I can average down on my current cost basis of $14.50. I would like to build my position to around 150 shares and then slowly accumulate additional shares with a DRIP.
Any others with F as a part of their portfolios?
It is an interesting pick for some, but it could be a diamond in the rough in the long run. Sub-14 prices is a great place to buy.
ReplyDeleteHi, Special Agent Dividend.
ReplyDeleteI agree that F is a good value at the current price. As mentioned, the P/E is attractive and the dividend has room to grow. Congrats on the purchase!
Goosemann Jones
Flight to Dividends Blog