There are a lot of moving parts and variables for investors to consider when researching Ford Motor Company (F -3.93%). On one hand, Ford is a Detroit icon and a global legacy automotive giant, which comes with much more stable business than upstart companies such as Rivian (RIVN -1.02%) or Lucid (LCID -7.78%). On the other hand, Ford doesn’t intend to become extinct and is investing heavily in the future of software-defined vehicles, autonomous technology, and electric vehicles (EV), and is even thinking outside the box by trying to win defense contracts. If you’re scratching the surface of Ford as a long-term investment, here are three things you need to consider.
Portfolio refresh!
It’s no secret in the automotive industry that fresh product sells faster, and it sells without needing margin-eroding incentives and deals. Investors may have missed the details, but Ford created a new team: product creation and industrialization. While it might take a little time for the name to catch on, this team is responsible for a massive portfolio refresh.
More specifically, by 2029 Ford plans to refresh a staggering 80% of its North American portfolio by volume, and 70% of its global portfolio by volume. Included in that portfolio turnover is the first vehicle on Ford’s lauded Universal Electric Vehicle (UEV) platform, the Fathom midsize pickup. The refresh will also deliver the next-generation F-150 and F-Series Super Duty. These vehicles haul big bucks and lucrative margins.
An overlooked aspect of this refresh will be what it does to the fleet of Ford vehicles hitting the road. By 2030, 90% of Ford’s vehicles by volume will feature updated electrical architectures and next-generation over-the-air capability. The reason this is important is it enables more rapid rollout of Ford’s BlueCruise and Ford Digital Experience, which will aid the company in progressing toward Level 3 autonomous driving and help the company improve the value of its digital offerings, which can be monetized.
Over the next few years, Ford’s product portfolio in its most profitable region, North America, will be more fresh, more advanced, and more profitable.
Outside the box
Young investors likely have never heard of Ford Aerospace division. That’s because Ford completely exited the defense sector in 1990, but after rival General Motors (GM -2.37%) revived GM Defense in 2017, it seems Ford felt compelled to reconsider the industry. Ford has secured a U.S. Department of Defense prototype contract to build three heavy-duty tactical truck prototypes from the automaker’s well-known F-Series Super Duty platform. For an example of how these contracts can add up, consider Ford’s bid for the U.K. Ministry of Defence’s Light Mobility Vehicle program, valued at $2.7 billion.
A completely different example of how Ford is evolving toward a new and potentially more lucrative future can be found with Ford Energy. Behind the scenes, Ford prepared a new business by securing supply chains and manufacturing sites, and what the automaker delivered was a subsidiary that will provide battery energy storage systems (BESS) for utilities, artificial intelligence (AI) data centers, and other large industrial customers. Ford plans to produce roughly 20 GWh annually with the first customer deliveries planned late next year. Analysts with Morgan Stanley and Barclays predict Ford Energy at full scale could generate between $500 million and $600 million in annual operating profit (EBIT) by the end of the decade.
Ford Bronco. Image source: Ford Motor Company.
Ford may be a legacy automaker, but that doesn’t mean it isn’t thinking outside the box to drive new streams of revenue and bottom-line profits.
Sleep at night
Ford has long been known for its lofty dividend, which currently pays out $0.15 per share quarterly, for a total $0.60 per share annually. That puts its current dividend yield at about 4.1%, which is lower than normal partly due to a spike in Ford’s share price during May. What income investors often overlook with Ford’s dividend is that the company frequently dishes out “special dividends” when it has a bit of extra cash and doesn’t want to permanently raise the baseline dividend commitment. In early 2024, Ford dished out an $0.18-per-share special dividend. It delivered another $0.15-per-share special dividend in February 2025.
Today’s Change
(-3.93%) $-0.55
Current Price
$13.45
Key Data Points
Market Cap
Day’s Range
$13.45 – $14.15
52wk Range
$11.11 – $17.78
Volume
68.9M
Avg Vol
49.4M
Gross Margin
8.00%
Dividend Yield
4.29%
Is Ford a buy?
If you’re an investor scratching the surface of Ford as a long-term investment, it’s important to keep in mind that the company is driving a massive portfolio refresh in its profit engine, North America, while thinking outside the box for new revenue streams with Ford Energy and defense contracts. To top it off, the company offers a lucrative dividend yield with frequent special dividends helping investors offset the cyclicity of the auto industry. Ford has work to do to change the narrative of its low-margin automotive business, but that’s something it can do as more high-margin business seeps into the sector through driverless vehicle technology and as digital subscription services become more prevalent.
