Can a legacy automaker thrive in a fast-changing world? That’s the multi-billion-dollar question that Ford (NYSE:F) and its stakeholders must face in 2024. There’s no denying that Ford’s rollout of electric vehicles (EVs) hasn’t been simple or problem-free. Still, my Ford stock analysis will show that the company can succeed and reward its loyal shareholders in the coming quarters.
From autoworkers’ strikes to interest-rate hikes, there was no shortage of issues for Ford to overcome in 2023. However, a new year presents new opportunities for Ford to demonstrate its value and growth. As we’ll discover, F stock is quite cheap and offers a great dividend, and the recent news surrounding Ford might not actually be as bad as it seems.
Multiple Reasons to Buy F Stock
As I just alluded to, Ford offers an enticing value-and-yield combination. Starting with the value proposition, Ford’s GAAP trailing 12-month price-to-earnings (P/E) ratio of 7.44x. is substantially lower than the sector median P/E ratio of 17.37x. Furthermore, Ford’s 5.27% forward annual dividend yield should strongly appeal to passive-income investors.
What about growth, though? Ford checks that box, or at least one Wall Street expert seems to think so. In particular, Freedom Capital Markets analyst Mike Ward claims that Ford “is better positioned than at any other time in history to benefit from a cyclical recovery.”
Of course, there’s no guarantee that a “cyclical recovery” in the U.S. automotive industry will happen this year. Yet, at least it looks like Ford probably won’t have to deal with large-scale workers’ strikes and interest-rate hikes in 2024.
Moreover, per Barron’s, Ward succinctly summed up the bullish argument for Ford stock. Specifically, Ford’s “balance sheet is in good shape,” and the automaker “has a new labor contract.” In addition, Ford’s free cash flow (FCF) “has been solid even in recent, tougher, years.”
Don’t Fret About Ford’s EV Production Pace
I just discussed a number of reasons to consider investing in F stock. However, some people might be concerned because Ford is dialing back the production pace of its F-150 Lightning electric pickup truck.
First and foremost, don’t jump to the conclusion that Ford is giving up on the F-150 Lightning and on EVs in general. The fact is, Ford expects its current-year F-150 Lightning sales to increase when compared to last year.
Martin Gunsberg, a Ford Model e spokesperson, assured that Ford continues “to see growth, just at a slower pace.” Meanwhile, Ford President and CEO Jim Farley declared that customers “love the F-150 Lightning, America’s best-selling EV pickup.”
Besides, Ford isn’t entirely reliant on its EV sales. Indeed, Ford plans to boost the production pace of its Bronco SUV and Ranger pickup truck, both of which are internal combustion engine (ICE) powered vehicles.
Ford Stock Analysis: There’s No Better Time to Buy It
As you can see now, today’s Ford stock analysis indicates a good value as well as a passive-income opportunity. Moreover, Ford can grow as a seller of both EVs and traditional, ICE-powered vehicles.
So, don’t let the scary headlines about slowing EV-model sales growth deter you from a great investment. The time to buy F stock is right now. That way, you can take advantage of a supreme value and get ready to collect those generous dividend payments.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
