Is Ford's Lucrative 6% Dividend Yield Safe?
Investors considering buying shares of Ford Motor Company (NYSE: F) have plenty to digest while developing their investment thesis. The company recorded a surge in warranty costs last year and will end up losing about $5 billion from its electric vehicle division in 2024. In addition, it has struggled to generate meaningful earnings overseas.
That said, for income investors, Ford's 6% dividend yield is enticing, but is it safe from being cut amid all of Ford's problems?
There are a number of reasons that Ford's dividend is appealing for investors. Not only is its 6% yield much higher than the S&P 500's (SNPINDEX: ^GSPC) average yield of 1.2%, the power of reinvesting dividends over time turns Ford into a wealth generator. Take a look at the difference between Ford's total return, which includes dividends, compared to just its stock price increase over the long haul.
Source Fool.com
