Is Ford Stock a purchase now?

Ford Motor Company (F -0.67%) In the long run, he was not angry with valuable investment. In the past 10 years, the stock of the Detroit automobile manufacturer has generated a total of 16% (as of May 22), including dividends. This is compared to 228%of the total revenue S & P 500 (^GSPC -0.67%).

Ford is an icon of the US economy. I do not believe that no one will claim it. But you have to buy this Automatic stock Right now? Consider the key bull.

Image Source: Ford.

Positive reasons for Ford stock

If you look at the stock price briefly, investors will know why they are optimistic. Because the evaluation is too low. At the time of this article, the price / price is 8.3. Given the entire market evaluation, investors will be struggling to find a business that provides this type of recognized value.

As a result, Ford pays heavy money Dividend yield 7.2%. Most investors can only be interested in capital audits. However, there are some market participants who want to add this income flow to the portfolio.

Ford Model E, the company’s EV segment, continues to burn cash. However, the rest of the business, including the professional division focused on legacy blue segment and commercial customers, still maintains profitability.

Ford is a leader in connection with pickup trucks and SUVs. And in the commercial department, the company is generating high margins and repetitive revenue, which focuses on software and joining. This can have a positive impact on the company’s future.

Can Ford stocks overcome the market?

Assuming that most readers choose individual stocks to surpass the S & P 500 after the next 10 years, Ford does not have a reason to be pessimistic. The business that requires a high -quality investor to pump brakes is very preferable.

Ford’s periodicity should be in mind. Fairly, this is not limited to this company because almost all automakers will have to deal with. Cars are generally the second largest purchases that people will be produced after a lifetime, so many thoughts and plans are decided. It is reasonable that this purchase can be delayed if time is rough and tight. Pressure demand has a negative impact on Ford’s sales.

This adds to the equation, especially if you are worried that the economic downturn will come this year or next. Ford’s revenue will surely be hit. And it’s not surprising to see net losses thanks to the tremendous low margin that the business already runs. It is not what investors want.

Great Warren Buffett likes to own a company with an economic moat. It is a durable set that helps to interfere with competitors and support financial results over time. I think this is a sign of high quality business.

Ford will not have a moat. One way to say is to see something very low. Revenue for investment capital (ROIC) Complex 8.6%. Investors who want to own the company for more than 10 years want more than 20%of ROIC numbers. This indicates that business can invest in a project that is profitable. Weighted average capital costTherefore, we create value in the process.

The characteristics of the automotive industry and in general Ford’s business will not be able to secure a sustainable competitive advantage by becoming a high -quality company. Investors must buy stocks now.