Core Insights - Ford Motor Company is focusing on improving quality to mitigate higher warranty costs, addressing declining sales in China, and navigating the electric vehicle market [1] - The company achieved a 9% increase in fourth-quarter U.S. sales, significantly outperforming its full-year sales growth of 4% [2] Sales Performance - Ford's full-year sales reached 2.01 million vehicles, the highest since 2019, driven by a strong electric vehicle lineup and continued success of the Explorer and F-Series [2] - The F-Series remains the best-selling pickup line in the U.S. for the 48th consecutive year [2] Ford Pro Division - Ford Pro, the commercial division, generated $7.4 billion in EBIT during the first nine months of 2024, outperforming Ford Blue's $3.7 billion [3] - Super Duty pickup sales increased by 30% in the fourth quarter, contributing positively to Ford Pro's performance [4] - Full-size vans accounted for approximately 50% of Ford Pro's sales in 2024, marking 46 years as a leader in the commercial van segment [5] Electric Vehicle Growth - Ford's electric vehicle sales, including full-electric, hybrids, and plug-in hybrids, rose by 38% in 2024, surpassing competitors General Motors and Stellantis [7] - The company achieved a record of 30,176 full-electric vehicles sold, with the Mustang Mach-E performing particularly well [8] - Hybrid vehicle sales increased by 40% year-over-year, totaling 187,426 units sold [8] Luxury Segment - Lincoln's sales represented 10% of Ford's truck segment sales in the fourth quarter, with a 35% increase in sales during the same period [11][12] - The luxury vehicles have higher margins, contributing positively to overall profitability [11] Challenges Ahead - Ford faces challenges in quality control, which has led to increased recalls and warranty costs, and needs to address its declining market position in China [14] - Despite these challenges, the company is producing vehicles that are in demand, which is crucial for its investment thesis [15]

Core Insights - Ford Motor Co. is the second largest automaker in the U.S., experiencing a recovery in inventory due to easing supply chain issues, but its stock has underperformed, down 16% [1] - The company is committed to its electric vehicle (EV) strategy despite projected annual losses of $1.5 billion in this segment [2][3] - Ford's Q3 2024 results showed an EPS of 49 cents, beating estimates, with revenues up 5.5% YoY to $46.2 billion, driven by new truck and SUV launches [4] Financial Performance - Ford Pro's commercial motor and EV vehicle revenues rose 13% YoY to $15.7 billion, with EBIT of $1.8 billion and a margin of 11.6% [5] - The Model E segment reported an EBIT loss of $1.2 billion, with cost improvements of $500 million offset by pricing pressures [6] - For 2024, Ford expects adjusted EBIT of $10 billion, with a projected loss of about $5 billion from the Model E segment [7] Market Position and Strategy - Ford's North American volume grew 8% YoY, increasing its U.S. market share by 40 basis points to 12.6% [4] - The company anticipates launching approximately 150 new EV nameplates in North America by the end of 2026 [3] - Ford's stock has an average price target of $11.83, indicating a potential upside of 22.5% [11]

Core Viewpoint - Ford's stock performance in 2024 has been disappointing, with shares down 19% and a total return loss of 13%, significantly underperforming the S&P 500's 25% return [1] Group 1: Positive Aspects - Ford's Pro segment, which serves business customers, has shown remarkable revenue growth of 19% year over year over the last nine months, outperforming the overall business [2] - The Pro segment also boasts an impressive third-quarter operating margin of 11.6%, indicating strong profitability [3] - Ford's current valuation is attractive, with a forward price-to-earnings ratio (P/E) of 5.7, significantly lower than the S&P 500's 21.4, suggesting a depressed valuation [4] - The dividend yield stands at 6.21%, appealing to income-seeking investors and providing ongoing payouts for current shareholders [5] Group 2: Negative Aspects - Despite the success of the Pro segment, Ford's overall growth remains low, with a third-quarter 2024 revenue of $46.2 billion only 25% higher than five years ago, indicating a mature auto industry [6][7] - The Model e division, focused on electric vehicle sales, is struggling, reporting a $3.7 billion operating loss in the first nine months of 2024, adding to a $4.7 billion loss in 2023 [8] - Ford lacks an economic moat, with a low return on invested capital (ROIC) of 1.8%, compared to the S&P 500 average of 10%, raising concerns about its competitive position [9] - The automotive industry is capital-intensive, requiring significant investment in research, development, and labor, making it less attractive for prospective investors [10] - Ford's disappointing track record for shareholders suggests that the stock may be best avoided [11]

Core Viewpoint - The analysis indicates that Ford Motor Company has maintained its dividend at the same level despite previous warnings about its sustainability, suggesting a cautious outlook on the company's financial health [1]. Group 1 - The last review of Ford Motor Company was over two years ago, with a "Sell" rating issued at that time [1]. - The company has not made any changes to its dividend, which raises questions about its future financial stability [1].

Core Insights - The article discusses the investment landscape and the potential opportunities within specific stocks mentioned, emphasizing the importance of thorough research before making investment decisions [1] Group 1 - The author, Parkev Tatevosian, CFA, has no position in any of the stocks mentioned, indicating an unbiased perspective [1] - The Motley Fool, the platform associated with the author, also has no positions in the stocks discussed, reinforcing the neutrality of the analysis [1] - There is a disclosure policy in place, suggesting transparency regarding any potential conflicts of interest [1]

Core Viewpoint - Ford is one of the largest automakers globally, and its stock performance is under evaluation for the year 2025 [1] Group 1 - The stock prices referenced were from the afternoon of January 8, 2025 [1] - The video discussing Ford's stock was published on January 10, 2025 [1]

Core Insights - Dividend stocks provide reliable passive income and can be less volatile than growth-focused investments [1] - Companies with high dividend yields must demonstrate the ability to maintain and grow dividends [1][2] Verizon - Verizon offers a 6.96% dividend yield and has consistently grown its dividend since 2005 [3] - In the first nine months of the year, Verizon paid out approximately 65% of its earnings in dividends, with earnings falling by about $1.8 billion compared to the same period in 2023 [4] - The company generated $14.6 billion in free cash flow, indicating sufficient capacity to cover and potentially grow the dividend [4] - Verizon aims to increase its fiber-optic internet market share and has added 2.2 million subscribers through the acquisition of Frontier Communications [5] Pfizer - Pfizer has a 6.4% dividend yield and has steadily grown its dividend since 2010 [6][7] - Analysts project that Pfizer's free cash flow will adequately cover the dividend in the coming years, with management committed to maintaining and growing the dividend [8] - Pfizer is focusing on developing new drugs, particularly in oncology, and acquired Seagen for $43 billion to enhance its pipeline [9] - Management anticipates that Seagen could generate $10 billion in revenue for Pfizer by 2030 [9] Ford - Ford pays a 6.14% dividend, but its dividend history is more volatile due to the cyclical nature of the auto industry [10] - Management aims to return 40% to 50% of free cash flow to shareholders, with expected free cash flow of $8 billion and $9 billion in 2025 [11] - Ford's stock faced challenges in 2024 due to vehicle recalls and warranty costs, but management expects improvements in electric vehicle earnings by 2025 [12][13]

Ford's Stock Performance in 2024 - Ford's stock declined by 18% in 2024, while General Motors' stock jumped by 48% [1] - The decline in Ford's stock was driven by multiple challenges, including quality issues, high warranty costs, and struggles in the EV market [9] Quality and Warranty Issues - Ford has led the US auto industry in recalls for three consecutive years and may continue in 2024 [2] - Warranty expenses increased significantly, with $2 billion in Q2 2024, representing 4% of sales, up from an average of 1.6% between 2011-2019 and 2.9% since 2022 [4] - Higher warranty costs contributed to a 26% decline in operating profit to $2.8 billion in Q2 2024, below Wall Street estimates of $3.7 billion [3][4] - Ford has been working to address quality issues, but the impact of newer models on recalls and warranty costs will take time [5] Electric Vehicle (EV) Challenges - Ford's EV division, Model-e, is expected to post a $5 billion loss in 2024 [6] - The company faces significant costs in developing its EV lineup [6] Struggles in the Chinese Market - Ford is facing growing challenges in China, where new-energy vehicles (EVs, plug-in hybrids, and hybrids) now dominate over half the market [7] - The Chinese EV market is in a brutal price war due to intense competition and government subsidies, making it difficult for foreign automakers, except Tesla [8] - Ford may need to reconsider its strategy in China, potentially including a complete exit [9] Summary of Ford's Challenges - Ford's 18% stock decline in 2024 reflects multiple issues: quality and warranty costs, EV development challenges, and struggles in China [9] - While these problems are fixable, they require time and strategic adjustments [10]

Company Performance - Ford Motor's operations in China earned approximately $600 million in 2023 despite challenging market conditions [1] - CEO Jim Farley highlighted that Ford is one of the few automakers making a profit in China [1] Market Strategy - Ford's earnings in China include revenue from exporting vehicles like the Lincoln Nautilus, which is exclusively produced in China for markets such as the US [2] - The company has been implementing an "asset-light" strategy in China, which has been previously emphasized by Farley [2] Industry Context - China remains a challenging market for automakers, particularly for Western legacy companies like Ford and General Motors [2]

Product Announcement - Ford Motor unveiled a special edition of its $325,000 Mustang GTD named "Spirit of America," paying homage to historical jet-propelled cars with the same name [1] - The vehicle features a white exterior with red and blue stripes, inspired by the overalls worn by Spirit of America driver Craig Breedlove during his record-breaking runs in the 1960s [1] Pricing and Availability - Ford did not disclose the pricing for the special-edition Mustang GTD, which is based on the automaker's current GTD model [2] - The car was revealed at the Detroit Auto Show [2]