Friday, January 13, 2017

Ford Motor Company! Dividend and Supplemental Dividend!

Ford Motor Company (F) announced its first quarter dividend and a supplemental dividend!

The great thing about a supplemental dividend implies there will be a recurring dividend when the company exceeds earnings and cash flow above a set base amount. A special dividend is usually a one-time event. F will continue with a supplemental dividend if the company does well.

So how did F do since my last blog entry Why I like Ford Motor Company. In the first quarter of last year F announced its regular dividend of 15 cents a share and a 25 cent special cash dividend. There was a total of 40 cents worth of dividends in the first quarter of 2016. This year the first quarter produced the 15 cents a share dividend and a supplement cash dividend of 5 cents! I was hoping for another "special" dividend and F came through, the special dividend was one reason I bought and own the company. F is a stable income producer with potential upside. With the closing stock price of $12.63 and dividends projected to be 65 cents this year we are looking at a 5.1% yield. My average price is $12.02, my (YOC) is 5.4%. I also have covered calls. I wrote January 20th 12.75 calls to add .26 to my income for the last quarter for a third of my shares. 

I like F moving forward it continues to run its business well. There are record sales in China. Steady profit and sales in the U.S. The new CEO has adapted to the political landscape. The company has a pipeline of popular models being reintrodued in the next few years. Its P/E ratio is still very low compared to the overall market. F has a management committed to give back to shareholders. 

My strategy moving forward will be to write calls and trade around a core position. I could see the shares rising if the market continues upward momentum. I see limited down side unless a unforeseen issue arises. There is also the chance of P/E expansion. 


Disclaimer: This is a personal weblog. The opinions expressed here are my own. All data and information provided on this site is for informational purposes only. Please do your own research before investing.


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