After hitting a 52-week low of $8.44 per share in April, Ford Motor Company (NYSE: F) stock has bounced back sharply, gaining more than 20% as of this writing.
Yet Ford stock's fall over the past year or so has pushed its dividend yield to 5.6% at a share price of $10.70. Ford, however, also paid a special dividend of $0.15 per share recently. If you factor that in, Ford stock's yield climbs to a juicy 7% right now.
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Ford's last quarterly dividend payment of $0.15 per share amounts to an annualized dividend of $0.60 per share. That means if you buy 1,667 shares of the auto giant for around $10.70 per share, or invest roughly $17,840, you can earn $1,000 in a yearly dividend from Ford.
Remember, that's before accounting for special dividends. Ford has paid a special dividend in each of the past three years. If it pays another one over the next year, 1,667 shares will fetch you more than a $1,000 yearly payout.
Ford's dividend record has been choppy. It suspended its dividend in 2006 and 2020. Investors now fear another dividend cut now that Ford recently suspended its financial guidance for 2025, citing "tariff-related uncertainty."
Tariffs could hit Ford's adjusted earnings before interest and tax (EBIT) by almost $2.5 billion this year, or by $1.5 billion even after potential cost savings. The uncertainty was what compelled management to withdraw guidance.
Tariffs have rattled the entire auto industry, and if not for the uncertainty, Ford says its underlying business could still meet its original adjusted EBIT guidance of $7 billion to $8.5 billion. However, Ford's free cash flow comfortably covers its dividend, and its hefty cash and equivalents balance of $21 billion at the end of the first quarter should be enough to support its dividend and yield.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.