All It Takes Is 1,700 Shares of This High-Yielding Dividend Stock to Generate Over $1,000 in Yearly Dividends.
Key Points
Ford Motor Company is working on turning itself around.
It's embracing hybrid vehicles and investing in other new technologies.
Its dividend yield and valuation are quite appealing.
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Investors considering Ford Motor Company (NYSE: F) have some pluses and minuses to weigh as they decide.
A big plus for the company is its dividend, which recently yielded a solid 4.25%. With that kind of yield, you could generate more than $1,000 in annual income if you owned around 1,700 shares. Those shares would cost you about $23,400, as of Aug. 6.
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Why invest in Ford? Well, it has been working to turn around its fortunes, and management is optimistic, having recently increased its projections. The stock has averaged annual gains of roughly 5% over the past five, 10, and 15 years, but it's up around 33% over the past year.
Image source: Getty Images.
In its second quarter, announced in late July, Ford reported a decline in revenue, citing "lower wholesale volumes, including the discontinuation of products, aluminum supply constraints, and the right-sizing of Gen-1 electric vehicle volumes to customer demand..." CEO Jim Farley noted, "We delivered another strong quarter and raised our full-year guidance, but the more important story is the growing evidence that Ford is becoming a more profitable, more disciplined, and genuinely different company."
Ford has been expanding its scope, too -- offering hybrid vehicles and even expecting to offer eyes-off, hands-free vehicles in 2028, which is not very far away.
The stock's valuation is another attraction. Its price-to-sales recently was an ultra-low 0.30, and its forward-looking price-to-earnings (P/E) ratio was just 8.
Ford's continued turnaround is not guaranteed, though. As always, it faces risks such as increased competition and union demands, not to mention potential geopolitical unrest. But it appears to be on the right track, and it's set to reward long-term patient believers with a generous dividend.
And Ford isn't the only appealing dividend-paying stock out there. There are plenty with similar or higher yields and plenty with smaller yields but faster-growing payouts. A little digging will turn up some solid prospects. Or just stick with a high-quality dividend-focused exchange-traded fund (ETF) to keep things simple.
Should you buy stock in Ford Motor Company right now?
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Selena Maranjian 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.
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