Sunday, January 31, 2016

Recent Buy: Ford Motor Company

2016-01-26: Bought 280 shares of F at $12.24 per share.
2016-01-29: Bought 150 shares of F at $11.77 per share.

Founded in 1903 and based in Dearborn, Michigan, Ford Motor Company (NYSE:F) manufactures and distributes automobiles worldwide. The company has around 62 plants across the world and offers vehicles primarily under the Ford and Lincoln brand names. Ford sells its products through distributors and dealers, as well as through dealerships to fleet customers. The company provides vehicle financing products through a wholly owned subsidiary, Ford Motor Credit Company LLC.

I already own 170 shares of Ford, which I bought in November 2014 at an initial yield on cost (YoC) of 3.96%. YoC for the 2 buys is 4.9% and 5.1%, respectively, and the average YoC of my Ford holding is 4.64%.

With these buys, I'm increasing my total share count to 600 and DivGro's projected annual dividend income increases by $258 to $7,535.

To see why I increased my investment in Ford, please read this article at Seeking Alpha. One of the reasons is that I wanted to grab more of the special dividend Ford paid recently. Another reason is that I want to write covered calls on my Ford shares, and so increasing the effective yield of my investment!


Please feel free to leave comments on this article either at Seeking Alpha or here, on my blog. I'll do my best to respond to each comment as quickly as possible.

6 comments :

  1. Ford is a good pick. It was just being caught in the middle of selling off of an auto sector lately. Nothing really to do with Ford itself. Securing 5% dividend from an auto manufacturer is really excellent. Good move!

    BeSmartRich

    ReplyDelete
    Replies
    1. Hi BeSmartRich

      Thanks for reading and commenting. You're right, there seems to be some selling in the auto sector happening. I like Ford for several reasons. One reason is because the company didn't ask for bailout money at the hight of the financial crisis.

      Take care!

      Delete
  2. DivGro,

    I've been looking into adding Ford to my own portfolio for some time. I like how during the bailouts, they refused them and instead relied on cash for clunkers and cost cutting to get through. It shows a lot about the company as a whole. I've just been nervous ever since because we saw too many big auto companies turn over during that period to put my money on them. Any advice or items to add on this subject?

    -DM

    ReplyDelete
    Replies
    1. That is one of the reasons I like Ford, too. In fact, Ford famously supported the bailout requests from competitors... My idea with investing in Ford is to collect dividends. I'm not expecting the share price to grow expansively. The company has a smallish dividend payout ratio, so I believe the dividend is relatively safe. And if Ford continues to pay special dividends rather than increase their dividend, I'm OK with that!

      Delete
  3. Thanks to this post Ive also discovered Ford, probably my next buy unless I found something more attractive!
    Thanks and keep posting! One of the most motivating blogs at the moment :)

    ReplyDelete
    Replies
    1. Hi Dividendstrainer -- thanks for reading and commenting. Best of luck to you in your dividend journey. Please visit again!

      Cheers
      FerdiS

      Delete

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