The fact is, the fundamental business matrix for both isn't as strong as it once used to be and could soon snip dividends. Ford already has a history of unkind cuts. CenturyLink is hardly any competition for larger mobile carriers. Here's why these stocks should be avoided. Both companies' shares were roughly flat in Friday trading.
Ford has been going through a difficult period. The cloud over the company has as much to do with the 18% year-to-date decline in its stock price as with the overall sluggish sales of its cars.
Ford has struggled to keep pace with Japanese carmakers like Toyota Motor, Honda Motor and premium electric vehicle company Tesla Motors. These manufacturers have been rapidly changing the nature of the car business.
In addition, operating margins in Europe, Middle East/Africa, Asia Pacific and South America in the fourth quarter were uniformly lower than in North America, where sales are dipping.
Car making and selling is undergoing a paradigm shift. These are some of the reasons why Ford's 5.2% dividend yield looks shaky.
The dividend yield (calculated as dividend as a percent of share price) for Ford is masking bigger problems, namely that the decline in Ford's stock price is what pushed the yield up.
There are several other reliable dividend creators out there: McDonald's, Johnson & Johnson and Coca-Cola.