Wall Street quiet as solar eclipse takes center stage >>> READ MORE

Do These 5 Automakers Make the Grade?

Some pass with flying colors; others might need summer school

      View All  

Report Cards for Automakers – Ford (F)

Automakers auto stocks Ford stockCurrent Dividend Yield: 3.1%
Grade: B+
YTD Performance: +4%

Despite reporting a first-quarter earnings miss last month, there are several things to like about Ford stock.

Ford still is on track to deliver pre-tax earnings of between $7 billion and $8 billion for the full year. Ford’s Europe operations, which have been a quagmire for the automaker for the past several quarters, are beginning to cut losses and position it for sales growth. The automaker turned a loss in the Asia-Pacific region into a $291 million profit — China operations were particularly strong.

Meanwhile, Ford stock sports a price/earnings-to-growth ratio of less than 1 (indicating it’s undervalued), and its forward P/E of 8.4 is also attractive. It’s also hard not to like Ford’s 3.7% current dividend yield, and plans to buy back $1.8 billion in stock underscore the company’s commitment to shareholder value.

One potential headwind: On July 1, turnaround architect Alan Mulally will hand off the top job to his handpicked successor, Mark Fields. Fields will provide continuity of leadership, but expect Ford stock to lose some lift this summer due to the transition.

Next Page

Article printed from InvestorPlace Media, http://investorplace.com/2014/05/auto-stocks-5-automakers-car-sales/.

©2017 InvestorPlace Media, LLC