General Motors Company (GM), Ford Motor Company (F): The Automaker’s Recovery

Where Ford Motor Company (NYSE:F) is already the No. 1 automaker in America

By the time most investors and customers find out Ford is the number one automaker, most of the recovery in Ford’s share price likely will be complete.  There is some debate and fluctuation in the number one selling auto and truck, but recently many believe them to be the Ford Fusion and the Ford F-150.

What is unmistakeable would be Ford’s dominance in operating margin: Ford at 10.4% and GM trailing at 8.4%.  Some would not include any measure of how Ford or GM treat their shareholders, but I do.  Ford’s dividend yield is 2.3%; GM’s is nada, as in zero.  Then there is the obvious Ford lead in market cap, as well as reports that customers are flocking to Ford’s products, to the point that keeping up with demand is a worry.  This all equals Ford creating value at a dramatic pace and fixing its major problems faster than GM.  Sooner rather than later, that trajectory makes Ford No. 1.

Numbers are nice, what about the ground game?

Just to check on the real picture behind the numbers, I went off to test drive what I believe to be my next auto, a Ford Fusion Hybrid.  I’m not much of a “motor head,” I tend to the utilitarian view, which is why my 99 Subaru Outback made in Indiana has 397,000 miles on the odometer (no fooling).  I was particularly impressed with the fit, finish and handling of the Fusion.  It’s easy to see why its selling well.  Ford is even sending its owners a “software upgrade” attempting to improve mileage, and this is a first for an automaker I think.  Way to take care of the customers, Ford.

Is there a Ford in your future?  There is still time to add Ford to a portfolio at a reasonable P/E of 11.8 and perhaps closer to 10 on a pullback with a dividend yield over 2%. Ford leadership is aggressively focused on fixing the remaining problems, executing well and taking great care of its customers and shareholders.  That’s why I am long Ford, the taxpayer’s friend.

The article The Automaker’s Recovery originally appeared on Fool.com and is written by Charlie Wagner.

Charlie Wagner owns Ford.   The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Charlie is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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