Ford’s share price dropped about 2.5% in 2014 as the company struggled with sales of its top-selling F-150 Series pickup trucks. New pickup models from General Motors Co. (NYSE: GM) and Fiat Chrysler Automobiles N.V. (NYSE: FCAU) sliced away at Ford’s multi-decade lead in pickup sales, even though the F-150 ended the year as the best-selling light vehicle in the United States again.
The roll-out of the all new aluminum-bodied pickups began in November, and when Ford released December sales figures on Monday a company executive said, “Demand for the all-new F-150 also is very high, and it now is the fastest-turning vehicle in Ford showrooms, averaging just five days on dealer lots in December.”
The new F-150 cost the company billions of dollars for design and retooling, and shareholders have shared the cost through declining costs and a lower share price. A bump to the company’s dividend underscores Ford’s confidence that it has a winner with its new pickup and that sales and market share will recover in 2015.
Based on Wednesday’s closing price of $15.04, the company’s dividend yield is around 4%, ahead of GM’s 3.4% and Chrysler, which pays no dividend. While Chrysler is unlikely to change its policy, GM becomes a good candidate for a dividend hike as well.
Ford stock traded up about 2% at $15.34 in Thursday’s premarket, following the announcement, and opened around $15.40. The 52-week range is $13.26 to $18.12.
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