Some folks might be tempted to view Ford (NYSE:F) as an old-fashioned automaker. At the same time, today’s investors may see F stock as a relatively safe, “steady Eddie” asset to hold for many years.
Yet, this characterization isn’t entirely fair or accurate. Ford has been around for a century, sure, but the company remains on the cutting edge of new vehicle technology.
Sure, there are start-up companies seeking to dominate the electric vehicle (EV) market today. If you listen to Ford’s critics, you might be led to believe that the company is an old-fashioned relic of the days when Detroit ruled the automotive landscape. But don’t count Detroit out, and don’t make the mistake of dismissing Ford as an EV market contender. Ford still has plenty of clout in the traditional automotive industry that could help them to easily transition into the EV space.
F Stock at a Glance
The journey that F stock took from around $4 in March of 2020, to around $20 in late 2021, has been nothing short of amazing. It just goes to show that buying during times of peak panic can be a highly profitable strategy. Of course, this strategy is easier to implement when you’re dealing with large, well-established and well-financed companies like Ford.
This year, F stock stair-stepped its way up to $11, then $14, and finally $19. The stock’s 52-week high at the end of November was $20.79. After such an impressive run-up, some folks might assume that Ford shares are too expensive to buy. Does this line of argument really hold up, though?
Instead of relying on assumptions, let’s check the data. As it turns out, Ford’s trailing 12-month price-to-earnings ratio is 27.41. That’s not what you’d expect to see with an expensive stock.
Moreover, Ford pays a forward annual dividend yield of 2.09%, which is the icing on the cake for the company’s long-term investors.
It’s Not All Electric
Before we delve into the fast-paced world of EV’s, it’s important to bear in mind that lots of people drive traditional vehicles. And, many of those vehicles were made by Ford. For instance, through October, Ford sold around 80,000 of its Ranger model trucks in 2021. That’s not too shabby, considering there’s been a global semiconductor shortage this year.
Furthermore, Ford recently unveiled its 2022 Ranger midsize pickup truck. Jim Farley, Ford’s Chief Executive Officer (CEO) tweeted: “Sold in more than 180 countries around the world, it’s truly a global vehicle,” in reference to the new Ranger version.
In total, Ford’s U.S. auto sales for November were 158,793 units, representing a 5.9% year-over-year increase.
EV sales will be part of that total, no doubt. Nevertheless, Ford’s ability to deliver internal-combustion vehicles shouldn’t be ignored. After all, America’s migration to EV’s won’t happen overnight and the non-electrified Ranger will still appeal to many drivers.
Prepare for a Big Launch
All of that being said, Ford clearly recognizes that EV’s must be a key component of the automaker’s business model. Thus, it could be a seismic event when Ford starts to ship out its electric F-150 pickup truck to the public in 2022.
Some truck enthusiasts might even consider this launch to be a pivotal event in automotive history, akin to Ford’s introduction of the Model T in 1908.
The F-150 is an iconic truck model. If any vehicle can entice reluctant drivers into the EV revolution, it’s that one. Put it this way: the F-150 has been the best-selling vehicle in the U.S. for over 40 years. Electrifying this truck could, indeed, electrify the American EV market in general.
The Takeaway on F Stock
You might not have expected Ford to jump head-first into the vehicle-electrification movement. Yet, today’s automakers must be willing to adapt to consumers’ demands.
Ford remains a highly investable company because it’s not just adapting — it’s ahead of the curve.
Therefore, feel free to hold your F stock shares for solid dividends, good value and a stake in the future of automotive technology.
Ford currently has a grade of “A” in my Portfolio Grader.
On the date of publication, Louis Navellier had a long position in F. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
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