How Do You Spell Ford as an investor?

One Suggestion Might Be Fix or Repair Daily

Those who are fans of General Motors or Chrysler might say “FORD” stands for “Fix Or Repair Daily.” Our last four new vehicles have all been Fords, and they have rarely been back to the dealer for anything other than preventative maintenance. Therefore, I don’t have agreement with the aversion some have to Ford products.

FORD – is it Fix Or Repair Daily? I don’t think so.

I respect Ford’s management. When the other auto manufacturers were seeking bailout money, defaulting on their bonds (promises), rewarding the United Auto Workers, and declaring bankruptcy, Ford did the right things. That isn’t to say Ford is perfect, but they stand head-and-shoulders above the other two legacy auto makers. Tesla, of course, is a new kid and they make some nice cars. However, they also lack sales in significant numbers. TSLA’s P/E ratio is a nose-bleeding 166.36 whereas Ford’s is a rational 10.14. If I had purchased TSLA’s shares a long time ago, that would have been a profitable trade. However, I don’t regret avoiding TSLA. I’m still not convinced it is a good fit for our investment portfolio.

My Suggestion for What Ford can Mean

I like to look at what Ford is as an investment. That includes their very successful product lineup and future lineup, my ability to make good money selling covered call options, their remarkable recovery during difficult years, and now, the added lubrication of dividends. So, 1) F is for F-150 Trucks; 2) O is for covered call Options; 3) R is for Remarkable Recovery and 4) D is for Dividends.

F-150 Options Remarkable Recovery and Dividends – F.O.R.D.

Ford has had many years of success with their F-150 truck and SUV offerings. You won’t see a lot of Ford cars because their SUV’s and trucks are the main products. When I first started buying shares of Ford, they paid a dividend. Usually, when a dividend is cut or suspended, I sell the shares. In the case of Ford, I just started trading covered call options instead. For 2021 YTD, I have received $2,222 in covered call options income while I waited for the dividend to return.

Ford’s remarkable recovery has been encouraging. As I saw them make the right decisions, I kept adding shares. We now own 4,130 shares of Ford in our six accounts: IRA, Roth IRAs, and our brokerage accounts. When you can buy shares when others are nervous, you might be rewarded if you have a long-term perspective.

Which brings me to the “D.” Our patience has been rewarded. Ford restarted their dividend at $0.10 per share. That means our first quarterly dividend will be $413. That, in addition to continuing to sell covered call options, makes Ford an even more attractive investment.

Ford is Doing Nicely and I believe the best days are ahead.

What Are My Next Steps?

If the shares bounce higher tomorrow, I will probably hold off on buying more shares. However, I will be watching for opportunities to add to our Ford holdings. I wouldn’t be surprised to see Ford shares up 5% or more tomrrow.