The stocks of Ford Motors are attractive for the Dividend Investors.

The investors who are looking for consistent dividends are looking for the exposure in the auto industry and for that they have traditionally two options, one is of Ford Motors Company and the other is General Motors. These two auto manufacturer are regarded as stable dividend paying stock. The 2008 financial crises are very challenging for the auto industry as the sales of car across the globe decreases sharply during the days of crises. Auto manufacturer like Chrysler and GM approach the government for the bailout and files bankruptcy in 2009. During this downturn, the companies are burning with free cash flows and therefore all the three car makers had reduce their dividend payments to the shareholder.

Coming back to 2014 where the key players in the local auto industry have reverted back to their profitability position. Automakers are no longer under the ownership of government and are now returning dividends to their shareholder freely. In 2012 Ford motors had revised its dividend payout policy that has eventually increase ford motor company stock price, and in the same way GM reinstate its quarterly dividend payments to 30 Cents/ share.

In December 2013 we indicate some reasons to be bullish on Ford because of the company fundamentals and initiatives in Growth in the emerging markets. Also positive fundamentals suggest better F earnings.   

Ford stock analysis reveals that Ford has ceased to pay dividend payments just before the financial crises but it has restored the payouts in 2012 first quarter. After that the company has double its interim dividend payments. In 2013 fourth quarter, Ford motors have again increased its dividend payment to 12.5 cents/share.

In a span of two years, the dividend payments increase with 150%. Ford is returning an increasing value to the shareholder which is in favor of the company provided that the prospect of the global industry improves. Ford motors good dividend per share has translate into a dividend yield of 3.25%. General motors Dividend yield is also close to 3.3%.

As there is an improvement towards the cash flow position so there is an expectation that the company will increase dividend per share which will ultimately improve the F stock dividend yield provided other things remains the same.

Ford’s cash flows from operations (CFOs) have shown steady improvement since 2009. 2012 was the only year in which they declined, when the company faced increased expenses following restructuring activities.Since 2009 the company has showed a steady improvement in its cash flow from the operations. In 2012 when the company is under restructuring activities which resulted declined in the CFOs. Fords Free cash flow from the firm also improved over the years after it falls in 2013 and then again pick up thereafter.

Due to the challenges faced by the automaker in the emerging markets in the year 2014 and increased expenditure due to the launch of new vehicles, the automaker faced decreased FCFs, but the analyst expects that the Ford FCFS will return back to the 2013 level and then will improve further in the upcoming years and will impact on the f stock price as well.

During the era of financial crises, ford debt position was so severe that it was on the edge of government-led bankruptcy. Ford motors did not file the bankruptcy as GM and Chrysler did but it goes through an extensive restructuring in order to adopt the slimmer cost structures that enables the company to absorb its losses during the period where the sales of the car are on the lower side, just because of that the company Debt to Equity ratio improved a lot and in 2013 the company was able to reduce this ratio to 286% which in 2012 was 406%.