Don’t Buy Ford Stock For A Long-Term Investment Portfolio

Back in the 1910s, Henry Ford showered capital stockholders of The Ford Motor Company with regular dividends and larger special dividends as the booming growth of the Detroit locomotive manufacturer was gushing out profits well above what could be reinvested into the company and set aside for a rainy day. Whether or not they realize it, the current Board of Directors are following in the capital allocation footsteps of Ford himself by yesterday declaring a $0.15 quarterly dividend in addition to a $0.25 special dividend that will be paid on March 1st.

This has gotten a lot of income investors excited. And I understand why. At $12.85 per share, the $0.60 annual dividend represents a 4.66% dividend yield. The $0.40 dividend on March 1st (which includes the special dividend payout) represents an immediate cash return of $3.11 for every $100 of Ford stock that you own today. The investors that … Read the rest of this article!