Ford Motor Company (NYSE:F) is underperforming relative to its competitor, General Motors (NYSE:GM). Uncertainty is hurting the stock value. Although GM and Ford stock trade at similar P/Es, Ford may potentially come out ahead, but only if its latest bold moves pay off.
Ford said it would refresh 75% of its lineup while forecasting a non-cash FY2018 loss of $877 million. This is due to a pension re-valuation. EPS will come in at $1.30 a share, implying a forward P/E of 6.5 times (on a recent price of $8.60).
Ford’s dividend is safe: it declared a quarter payout of $0.15 a share.
Ford’s ongoing, multi-decade headwind is competition from Japan. Japan’s Toyota (NYSE:TM) and Honda (NYSE:HMC) both have a good reputation for quality. Ford gets in the news because of product recalls. Still, Ford is on the list of reliability year-after-year. And if Ford strikes a joint venture with Volkswagen to share in R&D, that would prove positive.
F-150 Electric
Getting an electric version of the F-150 to market is mostly symbolic than profitable. The gas-based truck is constantly a top seller every year. But an electric F-150 is a step in the right direction. Demand for SUVs and trucks are strong, so getting an electric truck out could win customers who care for the environment.
Ford reports on Jan. 23. Good or bad, results are priced in.
