A Rough Road Ahead for This Automaker's Dividend?

Here's what Safety Net says... [Shield] AN OXFORD CLUB PUBLICATION Loyal reader since April 2024 [Wealthy Retirement]( [View in browser]( SPONSORED These Overlooked Stocks Historically Go CRAZY When the Fed Cuts Rates Leading up to the September meeting, traders have placed the odds of a rate cut as high as 100%. Markets will rally. Investors will celebrate. But few will have any idea of the true potential before them... In fact, 99% of investors will miss out on the greatest profit opportunity from the Fed's decision. They'll be so focused on the S&P 500 that they will miss a rare group of Fed "Power Stocks..." which historically skyrocket on rate cuts. These stocks as a whole have delivered more than twice the return of the S&P 500 in the 90 days after a rate cut... with the top stocks shooting 3,600+% higher within the year. [Get details HERE on what these stocks are and which 3 are Alex Green's favorites.]( [SAFETY NET]( [Does Ford's Dividend Have a Rough Road Ahead?]( [John Oravec, Research Analyst, The Oxford Club]( [John Oravec]( Ford's (NYSE: F) vehicles may be "built to last" and "built Ford tough"... but is the company's dividend in jeopardy? It's been a rough road for Ford shareholders. The American automotive giant is still trying to recover from mistakes that plagued it in 2022 - particularly in supply chain and production stability. The stock now trades for less than half of what it did in January 2022. Since then, it's suffered from one bad earnings report after another. The company's most recent report on July 24 was particularly brutal. Ford's second quarter earnings per share came in more than 30% below Wall Street's expectations. Shareholders dumped the stock and wiped out more than 18% of Ford's market cap in just one day. [Chart: Ford Stock Has Been Leaking Oil]( [View larger image]( Ford pays a $0.15 per share quarterly dividend, which equates to a 5.4% yield at current prices. But after seeing the disappointing second quarter results, investors were left wondering whether the dividend is safe or in danger of being cut. Today, I'm stepping in to give you that answer. Let's crunch some numbers. SPONSORED [Alexander Green Reveals the Single AI Stock Where He's Invested $100K]( [Alexander Green All-In]( [Click Here to Find Out]( While 2022 was a difficult year for the company, the last two years have been surprisingly good given the circumstances. After Ford reported -$13 million in free cash flow in 2022, its supply chain issues eased up last year, and its free cash flow jumped back up to $6.7 billion. On top of that, forward estimates predict that free cash flow will increase by an additional 4.6% this year. Unfortunately, Ford's free cash flow remains well below its 2020 figure of $18.5 billion, so we'll have to knock the stock's dividend safety rating down a peg. [Chart: Ford's Troubling Cash Flow Trend]( [View larger image]( Next, let's look at how much the company is paying out in dividends. As a reminder, the dividend payout ratio tells us what percentage of a company's cash flow it is returning to shareholders. Our golden number is 75% or below. Ford snuck just under that benchmark at 74.8% in 2023... But 2024's estimate is significantly lower at 34.8%. The company paid a special dividend in both years, but neither payout ratio crossed our threshold, so there is no reason to worry. Finally, we have to examine Ford's dividend history to see how often it has raised or cut its payout over the past 10 years. Is its track record strong enough to overcome its stagnant cash flow? 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