In the world of auto manufacturing, a series of headwinds which have hampered stock prices for some time are certainly warranted.
The share price of major U.S. auto manufacturers such as Ford Motor Co. (NYSE:F) certainly paint the picture quite well - since rebounding from recession-related woes, Ford's share price has languished as many investors and analysts question whether the world has arrived at "peak auto" and whether companies like Ford will be able to effectively, and cost-efficiently, transition production toward electric vehicles and away from gasoline and/or diesel engines.
That being said, fundamentally, it is clear to me that the Ford of today is not the Ford of yesterday, and many of the company's issues which took Ford to the brink of bankruptcy a decade ago are not relevant today.
The firm's new management team and relatively strong balance sheet and fundamentals paint a new picture for Ford, a company which has churned out record profits in recent years as people all over the world continue to upgrade their vehicles at an impressive rate.
For dividend investors, a 6.5% yield is nothing to sneeze about, and is a yield which should provide a significant amount of interest for those looking for blue chip dividend income in retirement.
While some risk of a dividend cut may be in the cards should Ford's cash flow deteriorate substantially, at this point in time, the firm remains on solid ground and dividend distributions are not in jeopardy, meaning the cheaper the company's stock get, the higher its yield - an excellent scenario for those who are less concerned about capital appreciation than dividend income.
Invest wisely, my friends.
