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Ford Motor

NYSE:F
Snowflake Description

Established dividend payer and fair value.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
F
NYSE
$48B
Market Cap
  1. Automobiles
Company description

Ford Motor Company, together with its subsidiaries, designs, manufactures, markets, and services automobiles in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. More info.


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3 Month History
F
Industry
5yr Volatility vs Market

Value

 Is Ford Motor undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Ford Motor to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of Ford Motor is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Ford Motor's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Ford Motor's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Ford Motor is good value based on earnings compared to the US Automobiles industry average.
  • Ford Motor is good value based on earnings compared to the US market.
Price based on expected Growth
Does Ford Motor's expected growth come at a high price?
  • Ford Motor is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Ford Motor's assets?
  • Ford Motor is good value based on assets compared to the US Automobiles industry average.
X
Value checks
We assess Ford Motor's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Automobiles industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Automobiles industry average (and greater than 0)? (1 check)
  5. Ford Motor has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (44.68%).

    Full details on the Value part of the Simply Wall St company analysis model.
X
Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for Ford Motor is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$14,696

Terminal Value

Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $4,220 × (1 + 2.47%) ÷ (17.53% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$28,710

Present value of terminal value:
$12,802

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$27,498 = $14,696 + $12,802

Value = Total value / Shares Outstanding ($27,498 / 3,972)

Discount to Share Price

Value per share:
$6.92

Current discount (share price of $12.07): -74.36%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 17.53% = 2.47% + (2 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($48,144,302,567).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

2.31 = 0.729 (1 + (1- 30%) (309.72%))

Levered Beta used in calculation = 2



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is Ford Motor expected to perform in the next 1 to 3 years based on estimates from 21 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
0.3%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Ford Motor expected to grow at an attractive rate?
  • Ford Motor's earnings growth is positive but not above the low risk savings rate of 3.6%.
Growth vs Market Checks
  • Ford Motor's earnings growth is positive but not above the US market average.
  • Ford Motor's revenues are expected to decrease over the next 1-3 years, this is below the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • Ford Motor's earnings are expected to grow by 0.3% yearly, however this is not considered high growth (20% yearly).
  • Ford Motor's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Ford Motor is not expected to perform strongly, Return on Equity (ROE) in 3 years is estimated to be below 20%.

Improvement & Relative to industry
  • Performance (ROE) is expected to be above the current US Automobiles industry average.
  • An improvement in Ford Motor's performance (ROE) is expected over the next 3 years.
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Future performance checks
We assess Ford Motor's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Ford Motor has a total score of 0/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Ford Motor performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Ford Motor's growth in the last year to its industry (Automobiles).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Ford Motor's year on year growth rate is negative over the past 5 years and the most recent earnings are below average.
  • Ford Motor's 1 year earnings growth is negative, it can't be compared to the 5 year average.
  • Ford Motor's 1 year earnings growth is negative, it can't be compared to the US Automobiles industry average.
Earnings and Revenue History
Ford Motor's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Poor return on shareholders funds (ROE < 20%) last year.
  • Ford Motor performed worse than the US Automobiles industry average based on Return on Assets (ROA) last year.
  • Performance based on Return on Capital Employed (ROCE) has been diminishing over 3 years.
X
Past performance checks
We assess Ford Motor's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Automobiles industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Ford Motor has a total score of 0/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Ford Motor's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Ford Motor's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Ford Motor is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Ford Motor's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Ford Motor's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Total debt is not covered by total short term assets, assets are 0.8x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • Ford Motor's level of debt (447% of total debt) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (526.8% vs 447% today).
  • Total debt is not well covered by annual operating cash flow (11.9%, less than 20% of total debt).
  • Interest on debt is well covered by earnings (EBIT is 4.7x coverage).
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Financial health checks
We assess Ford Motor's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Ford Motor has a total score of 3/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Ford Motor's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
5.39%
Current annual income from Ford Motor dividends. Estimated to be 5.22% next year.
If you bought $2,000 of Ford Motor shares you are expected to receive $1 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Paying above low risk savings rate (2.25%).
  • Paying above markets top dividend payers (3.18%).
Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Ford Motor's earnings are paid to the shareholders as a dividend.
  • Dividends paid are covered by net profit (1.8x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by net profit (2.5x coverage).
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Income/ dividend checks
We assess Ford Motor's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can Ford Motor afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Ford Motor has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Ford Motor's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Jim Hackett, image provided by Google.
Jim Hackett
COMPENSATION $62,247
AGE 62
TENURE AS CEO 0.5 years
CEO Bio

Mr. James Patrick Hackett, also known as Jim, has been Chief Executive Officer and President of Ford Motor Company since May 22, 2017. Mr. Hackett served as the Chief Executive Officer of Steelcase Inc. from 1994 to March, 2014 and served as its President from 1994 to April 22, 2013. He served as Chairman of Ford Smart Mobility LLC at Ford Motor Company from March 2016 to May 22, 2017. Mr. Hackett served as Vice Chairman of Steelcase Inc. until February 27, 2015. He served as the Chairman of Fifth Third BanCorp. and served as its Director at Fifth Third BanCorp since 2001 until April 19, 2016. He serves as Director of Ford Motor Company. He has been a Director of Fifth Third bank since 2001 and served as its Lead Director from June 2008 to April 15, 2014. Mr. Hackett serves as a Director of Business Leaders for Michigan. He has been a Trustee of Northwestern Mutual Life Insurance Company, of NML Variable Annuity Account A since 2000. He serves as a Director of Fifth Third Bank. He served as a Director of Ford Motor Company since September 2013 until March 10, 2016. He served as a Director of Steelcase Inc. since 1994 to February 27, 2015. Mr. Hackett served as a Director of Old Kent Financial Corp. since 1995. He Bachelor Degree at University of Michigan in 1977.

CEO Compensation
  • Jim's compensation has been consistent with company performance over the past year.
  • Jim's compensation appears reasonable.
Management Team Tenure

Average tenure and age of the Ford Motor management team in years:

2.1
Average Tenure
57.4
Average Age
  • The tenure for the Ford Motor management team is about average.
Management Team

Bill Ford

TITLE
Executive Chairman
COMPENSATION
$14M
AGE
60

Jim Hackett

TITLE
CEO, President & Director
COMPENSATION
$62K
AGE
62
TENURE
0.5 yrs

Bob Shanks

TITLE
Executive VP & CFO
COMPENSATION
$6M
AGE
64
TENURE
5.6 yrs

Joe Hinrichs

TITLE
Executive VP & President of Global Operations
COMPENSATION
$7M
AGE
50
TENURE
0.4 yrs

Jim Farley

TITLE
Executive VP & President of Global Markets
COMPENSATION
$7M
AGE
55
TENURE
2.8 yrs

Edsel Ford

TITLE
Consultant & Director
COMPENSATION
$927K
AGE
68

Ken Washington

TITLE
VP of Research & Advanced Engineering and CTO
AGE
57
TENURE
0.4 yrs

Bradley Gayton

TITLE
Group VP
AGE
54
TENURE
0.4 yrs

Ted Cannis

TITLE
Executive Director of Investor Relations
TENURE
2.3 yrs

Raphael Richmond

TITLE
Global Director of Compliance
AGE
47
TENURE
4.6 yrs
Board of Directors Tenure

Average tenure and age of the Ford Motor board of directors in years:

12.5
Average Tenure
63.3
Average Age
  • The average tenure for the Ford Motor board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Bill Ford

TITLE
Executive Chairman
COMPENSATION
$14M
AGE
60
TENURE
18.8 yrs

Jim Hackett

TITLE
CEO, President & Director
COMPENSATION
$62K
AGE
62

Edsel Ford

TITLE
Consultant & Director
COMPENSATION
$927K
AGE
68
TENURE
29.8 yrs

Donna Inch

TITLE
Chairman of Ford Motor Land Development Corp and CEO of Ford Motor Land Development Corp
TENURE
7.8 yrs

Jason Luo

TITLE
Chairman & CEO of Ford China
AGE
51
TENURE
0.2 yrs

Ellen Marram

TITLE
Lead Independent Director
COMPENSATION
$329K
AGE
70
TENURE
4.5 yrs

Stephen Butler

TITLE
Independent Director
COMPENSATION
$348K
AGE
69
TENURE
13.8 yrs

Tony Earley

TITLE
Independent Director
COMPENSATION
$325K
AGE
68
TENURE
8.7 yrs

Bill Helman

TITLE
Independent Director
COMPENSATION
$278K
AGE
59
TENURE
6.8 yrs

John Thornton

TITLE
Independent Director
COMPENSATION
$274K
AGE
63
TENURE
21.8 yrs
Recent Insider Trading
  • Ford Motor insiders have only sold shares in the past 3 months.
Who owns this company?
X
Management checks
We assess Ford Motor's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Ford Motor has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

Company Info

Map
Description

Ford Motor Company, together with its subsidiaries, designs, manufactures, markets, and services automobiles in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. The company’s Automotive segment develops, manufactures, distributes, and services cars, trucks, SUVs, and electrified vehicles under the Ford name; and luxury vehicles under the Lincoln name, as well as service parts and accessories. This segment markets its products through distributors and dealers, as well as through dealerships to fleet customers, including commercial fleet customers, daily rental car companies, and governments. Its Financial Services segment offers various automotive financing products to and through automotive dealers. Its financing products comprise retail installment sale contracts for new and used vehicles; and direct financing leases for new vehicles to retail and commercial customers, such as leasing companies, government entities, daily rental car companies, and fleet customers. This segment also offers wholesale loans to dealers to finance the purchase of vehicle inventory; and loans to dealers to finance working capital and improvement of dealership facilities, purchase dealership real estate, and other dealer vehicle programs. The company was founded in 1903 and is based in Dearborn, Michigan.

Details
Name: Ford Motor Company
Ticker: F
Exchange: NYSE
Founded: 1903
Market Cap: $48,144,302,567
Shares outstanding: 3,972,302,192
Website: http://www.ford.com
Address: Ford Motor Company
One American Road,
Dearborn,
Michigan, 48126,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE F Common Stock New York Stock Exchange US USD 02. Jan 1968
DB FMC1 Common Stock Deutsche Boerse AG DE EUR 02. Jan 1968
XTRA FMC1 Common Stock XETRA Trading Platform DE EUR 02. Jan 1968
LSE 0P4F Common Stock London Stock Exchange GB USD 02. Jan 1968
SWX F Common Stock SIX Swiss Exchange CH CHF 02. Jan 1968
BMV F * Common Stock Bolsa Mexicana de Valores MX MXN 02. Jan 1968
BOVESPA FDMO34 BDR EACH REPR 1 COM SHS Bolsa de Valores de Sao Paulo BR BRL 23. Aug 2012
Number of employees
Current staff
Staff numbers
201,000
Ford Motor employees.
Industry
Industry: Automobile Manufacturers
Sector: Automobiles and Components