After Ford Motor Company (F)’s Big Dividend Increase, Is the Stock a Buy?

Reasons for Optimism

On the other hand, the company announced fourth-quarter sales and earnings above estimates.  Ford reported net income of 40 cents per share.  In addition, total revenues increased 5.5% for the fourth quarter year over year.  Ford’s growth stands in clear contrast to GM’s operating results during the first nine months of 2012.  Automotive sales were essentially flat for GM during the first three quarters year over year, and operating income dropped 15% during the period as a result of higher costs.  The company will announce full-year results in mid-February, and investors would be wise to keep a close eye on the company’s progress.

With regard to Ford, I’m less concerned with the market’s reaction to the ongoing difficulties in Europe than I’m pleased with the company’s growth in revenues and the huge dividend increase.  Share price movements are a far littler concern to me than the underlying performance of the company.  It wouldn’t surprise me at all to see Ford drop further given the market’s tendency to overreact to short-term news.  Should shares continue to fall, Ford will become a clear value opportunity.  I will soon be placing the company on my watchlist.

The article After Ford’s Big Dividend Increase, Is the Stock a Buy? originally appeared on Fool.com and is written by Robert Ciura.

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