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Ford (F) Affirms Guidance, Announces Supplemental Dividend

Zacks

Ford Motor Co. F reaffirmed its 2016 pre-tax profit guidance of around $10.2 billion, which implies a decline from the 2015 level of $10.8 billion. The company expects 2017 results to be strong, albeit slightly softer than 2016. This is due to higher investments in electrification, autonomy and mobility. However, cost efficiencies of over $3 billion are expected in 2017.

Further, results are expected to improve in 2018 due to gains in the core business.

Concurrently, Ford announced a dividend of 15 cents per share for the first quarter of 2017 as well as a supplemental cash dividend of 5 cents per share. Both the dividends will be paid on Mar 1, 2017 to shareholders of record as of Jan 20, 2017.

Ford plans to distribute around $2.8 billion to shareholders in 2017, subject to approval by the company's board. This will take the cumulative distribution to shareholders to $15.4 billion since 2012.


Price Performance

Ford has underperformed the Zacks categorized Auto Manufacturers-Domestic industry over the last three months due to weak operating forecasts for the full year and concerns related to President-elect Donald Trump’s public criticism of the company’s plans to shift small car production to Mexico.

Share price of Ford increased 7.2% over this period, while the industry saw a 12.8% rise.

Zacks Rank & Key Picks

Ford currently carries a Zacks Rank #4 (Sell). Better-ranked companies in the auto space include Penske Automotive Group, Inc. PAG, Fox Factory Holding Corp FOXF and GKN plc GKNLY.

Penske Automotive carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. It has an expected long-term earnings per share growth rate of 8.2%.

Fox Factory carries a Zacks Rank #2 (Buy). The company has an expected earnings growth rate of around 16.6% for the long term.

Meanwhile, GKN holds a Zacks Rank #2. It has a long-term growth rate of 6.3%.

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