If you think Exxon is cheap, take a look at Ford (NYSE:F). The automaker just reinstated its first dividend since 2006 — which is a good sign. Unfortunately, at a measly 20 cents per year, it is only slightly better than a 10% payout ratio based on projected earnings of $1.87 in fiscal 2012. The headline yield of 1.5% also is very disappointing.
The caution about jumping back into the dividend game is understandable, since investors never would stomach a reduction in payouts after six years of getting stiffed. But come on — a 10% payout ratio? Even if you double the dividend, you’re still below the S&P average. Either corporate leaders have almost zero confidence in Ford’s future, or they’re just being greedy.