Due to the drop in Ford’s stock price, its dividend yield has climbed to 6.9%, much higher than the S&P 500’s (SPY) yield of nearly 2.0%. Ford paid a quarterly dividend of $0.15 per share in September for the third quarter, which is its normal quarterly dividend. It hasn’t, however, paid a special dividend in 2019. It usually pays one at the start of the year. Its high dividend yield and deteriorating stock performance have raised several questions.
The most pertinent question is whether the company can afford a dividend at this stage. Usually, a company’s level of FCF drives its dividend decisions. It is, however, not FCF in a quarter that decides dividend payments but rather FCF over time and—more importantly—future outlook.
View more information: https://marketrealist.com/2019/10/should-ford-investors-brace-for-dividend-cut/