Ford manufactures automobiles and is a staple in the United States auto industry. The auto industry in this country has certainly been through quite a bit in the past several years but continues to stand tall. When looking at Ford as a potential investment, there are several macro economic areas you should think about.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Ford income statement, its balance sheet, and the statement of cash flows. Potential Ford investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Ford investors may use each financial statement separately, they are all related. The changes in Ford's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Ford's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Ford
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Ford performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Ford shares is the value that is considered the true value of the share. If
the intrinsic value of Ford is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Ford. Please read more on our
fundamental analysis page.
How effective is Ford in utilizing its assets?
Ford Motor reports assets on its Balance Sheet. It represents the amount of Ford resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Ford aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Automobile Manufacturers space. To get a better handle on how balance sheet or income statements item affect Ford volatility, please check the breakdown of all its
fundamentals.
Are Ford Earnings Expected to grow?
The
future earnings power of Ford involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Ford factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Ford
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Ford
expected earnings.
And What about dividends?
A dividend is the distribution of a portion of Ford earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Ford dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Ford one year expected dividend income is about USD0.66 per share.
The Ford's current
Dividend Yield is estimated to increase to 0.18, while
Dividends Paid is projected to decrease to roughly 2.8
B.
Investing in dividend-paying stocks, such as Ford Motor is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Ford must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Ford. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.
Ford Gross Profit
Ford Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Ford previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Ford Gross Profit growth over the last 10 years. Please check Ford's
gross profit and other
fundamental indicators for more details.
What is driving Ford Investor Appetite?
First, there is the subprime lending in the auto industry that may have investors thinking twice about investing. Similar to the mortgage crisis of 2008, lenders were lending freely and this caused people who were financial unstable to obtain loans, when they should have been decline otherwise. In the auto industry, subprime lending is there but not on the scale of the mortgage crisis. However, investors need to be aware of this because if the overall market slows, there could be issues with lenders receiving payment for some of the below average note holders leading to a sector slowdown.
Next, there is the issue of maintaining brand image and Ford seems to be doing well in this category. We have all seen what happens when a brand is slammed for unsafe products in this sector, it ultimately leads to reduced sales and lower stock prices.
Lastly, Ford could be affected negatively should another economic crisis occur. Of course people say there may never be a crisis in our life time but who are we to estimate that. Many of the factors are largely out of control given how intricate our economy is. With that being said, you’ve seen how the auto industry had to be bailed out and if something happens again they could be back in that same situation.
The auto industry is certainly a well known sector and can help to diversify a portfolio, but you have to be aware of the many different factors that can affect the industry both positively and negatively. Ford is a staple and should be around for years to come. Take a look under the hood of the company and see how the financials appear. If they are well, move forward with your research. If not, look for value elsewhere as there are many investment opportunities in this industry.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Ford Motor. Please refer to our
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