Ford's (F) Dividend Boost Larger, Faster than Expected
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Price: $13.90 -0.86%
Rating Summary:
10 Buy, 24 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 4 | Down: 1 | New: 5
Rating Summary:
10 Buy, 24 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 4 | Down: 1 | New: 5
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Ford (NYSE: F) shares are on comfortably in positive territory Thursday after doubling its dividend earlier in the session. The venerable maker of Mustangs, Foci, and Escapes said its next quarterly payout would be 10 cents per share, from five cents previously announced.
RBC Capital's Joe Spak commented today that the dividend raise was more than expected and shows "strong confidence in their outlook, balance sheet and liquidity." He noted that if the current payout ratio (dividends to earnings) is maintained at about 28 percent, the dividend could grow with a five-year CAGR of about 10 percent on earnings expectations alone.
RBC has an Outperform rating on Ford.
But, size doesn't always matter. Sometimes its about speed. According to Jefferies' Peter Nesvold, Ford's announcement came "nearly a year" ahead of expectations. He boosted its price target by $2 to $16 following the announcement, maintaining a Buy rating.
Nesvold noted that Ford now has opened itself to a whole different type of investor: dividend seekers. Yield on Ford's new dividend is about 3 percent, versus a 2.2 percent average for the S&P 500. He noted that the boost also indicated confidence from Ford with its cash cost of European restructuring.
Shares of Ford are up 2.5 percent early.
For an analyst ratings summary and ratings history on Ford click here. For more ratings news on Ford click here.
Shares of Ford closed at $13.47 yesterday.
RBC Capital's Joe Spak commented today that the dividend raise was more than expected and shows "strong confidence in their outlook, balance sheet and liquidity." He noted that if the current payout ratio (dividends to earnings) is maintained at about 28 percent, the dividend could grow with a five-year CAGR of about 10 percent on earnings expectations alone.
RBC has an Outperform rating on Ford.
But, size doesn't always matter. Sometimes its about speed. According to Jefferies' Peter Nesvold, Ford's announcement came "nearly a year" ahead of expectations. He boosted its price target by $2 to $16 following the announcement, maintaining a Buy rating.
Nesvold noted that Ford now has opened itself to a whole different type of investor: dividend seekers. Yield on Ford's new dividend is about 3 percent, versus a 2.2 percent average for the S&P 500. He noted that the boost also indicated confidence from Ford with its cash cost of European restructuring.
Shares of Ford are up 2.5 percent early.
For an analyst ratings summary and ratings history on Ford click here. For more ratings news on Ford click here.
Shares of Ford closed at $13.47 yesterday.
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