Ford Motor Co. (F) increased its dividend for the first quarter of 2015 by 20% to 15 cents per share. Also, the announcement of the dividend hike led to a 2.5% increase in its share price.
The new dividend will be paid on Mar 2, 2015 to holders of the outstanding Class B and common stock. The record date for the quarterly dividend is Jan 30, 2015.
Ford tries to provide ample, sustainable returns to shareholders. In fact, this is the third dividend hike in three years. The automaker had increased the dividend to 12.5 cents from 10 cents per share in the first quarter of 2014 as well.
Ford’s financial strength is increasing due to the success of the One Ford plan. This is helping the company to increase capital deployment via dividend payments.
The increased dividend amounts to a yield of 3.9% per annum, based on the closing share price of $15.42 as of Jan 8, 2015. The old dividend translated into an annual yield of 3.2%.
Ford reported U.S. sales of 2,480,942 vehicles in 2014, in line with 2013. Sales volume of the Lincoln brand vehicles surged 16% year over year to 94,474 units, the highest since 2008.
Ford also reported a 19% year-over-year improvement to 1.11 million vehicles in China in 2014, comfortably meeting its target of 1 million.
Currently, Ford has a Zacks Rank #3 (Hold). Investors interested in the auto industry could consider better-ranked stocks like Meritor, Inc. (MTOR), Gentherm Incorporated (THRM) and Douglas Dynamics, Inc. (PLOW), all sporting a Zacks Rank #1 (Strong Buy).
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