Can Ford Afford Its Dividend?
As a business, Ford Motor Company (NYSE: F) hasn't grown much over the past decade. The stock is cheaper now, in 2020, than it was in 2010. And this means that pretty much all of its returns over the past 10 years have come from its dividend. The automaker distributes $0.15 per quarter, giving it a respectable yield of almost 6.5% at current prices.
But will the dividend last? And more importantly, can Ford afford it?
Given the company's stagnant bottom-line growth, its expensive restructuring program (which has been slow to show results), and a recent credit downgrade, the large dividend seems excessive. While the payout is still reasonably well covered by earnings, Ford is unlikely to continue its disbursement over the long term because of these expensive challenges.
Source Fool.com
