Ford
Motor Company was one of the first to bring the manufacturing revolution in
the US with its assembly lines in the early years of the 20th
century and today it is one of the leading automobile manufacturers in the
world. The main brand names behind the company are the all-famous Ford and the
more US based Lincoln. There was a brand Mercury, but it was discontinued in
2011. Among the most popular models are the Ford Mustang, the fuel saving Focus
and the F series pickup. Another sector of operations for the US manufacturer
is financial operations and the Ford Motor credit is among the US leading auto finance
organizations. Among the most important investments of Ford is a stake in
Mazda. Even though the company operates on an international scale and has more
than 65 plants, half of its revenue comes from selling in North America.
It is estimated that the company has around
24 400 patents, with a lot of other applications around the world, with an
average age for all of them to be a little bit less than five and a half years.
As you can see R&D activities are particularly important for the US giant,
which brings up the need for smart funding operations. The Financial services
sector of the company is concerned with financing automotive products through
subsidiaries such as the Ford Motor Credit Company. Ford Credit’s operations
consist of finding ways to finance the company’s vehicle development and to
support the dealers. A large part of the financial operations of this company
are based on receivables and leases, which separates its portfolio in two main
parts – consumer and non-consumer. Receivables and leases for the consumers are
about the products purchased by individuals and to small businesses that want
to finance the acquisition of the vehicles through the dealers for commercial
or personal usage. However, the financing product is all about retail
installment sale of new and old vehicles, which are leased to retail customers,
government organizations and rental companies.
Today
Ford stocks trade
for $15.87, scoring a rather controversial performance for the past 52 weeks.
The period lowest value was $13.52 and the highest $18.02, which as you see
offers a small degree of variance in comparison to other companies in the
sector, such as Tesla, which are characterized with rapid periods of booming
growth and sudden declines. With an EPS of $1.65 and a dividend yield of 3.16%
it is perceived as one of the more stable investments in the car manufacturing
industry, with its share prices being held low and available to all types of
investors.
Recently the company management released a
statement that there are plans to buy 116 million share back, for around $1.8
billion. This move is aimed towards offsetting dilution from recent stock
grants and shares that are issued with an option for convertible debt. With
recent financial statements showing that the US company is managing to improve
its profits abroad, this can lead to new bigger share repurchases, as the lower
prices in the last months suggest that the company is undervalued, even though
it performs very good with ever increasing profits and strong liquidity.
A proof of Ford’s international performance are the sales results from China,
where the company managed to sell nearly 97 thousand vehicles in April, which
is nearly 30% increase from April last year. On a general scale it sold 368
vehicles, which is a 41% gain in comparison to previous results. Just in April
the company’s sales rose with 11%, which suggests that the management is
considering to increase its internal funding and reduce its overall share
count.
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