U.S. auto giant Ford Motor Company (F - Get Report) is a smart deal right now for prudent investors.

Though shares are down about 6% over the past twelve months, the stock of the $50 billion enterprise now offers a rock-solid 4.78% dividend yield.

Sluggish of late due to fears surrounding the effect of Trump's proposed border tax and trade policies on international growth, Ford remains a dependable long-term investment, for income investors.

The last 12 months have been exciting times for the auto industry. Self-driving and autonomous cars are the newest sensations, with rumors on delivery, capability and market share infiltration setting the market abuzz.

Over the last 12 months, luxury car demand lifted Ferrari's (RACE - Get Report) shares by more than 57%. General Motors' (GM - Get Report) investors have gained seen an 18% return. Tesla (TSLA - Get Report)  shares rose 20% in that period, and Honda Motor (HMC - Get Report) shares added 10%.

No matter Ford's massive $150 billion annual sales figure, the company's relationship with Donald Trump remains tenuous.

Bill Ford and CEO Mark Fields were initially viewed as opponents, but that stance has changed since Ford canceled the construction of a plant in Mexico. The border tax issue still hangs over Ford's head, plus, Ford's China business could also be negatively impacted by Trump who's not one to mince words about the Asian giant's trade policies.

Remember, reduced tax breaks have created problems for Ford in China.

Given that the automobile business is low-margin, automakers never enjoy huge valuations. Earnings growth has been sedated and will probably remain as such.

Ford, which grew earnings per share (EPS) by 5.6% annually over the last decade, is expected to increase earnings by 2.9% over the next 5 years. GM's numbers are a tad worse, projected to decline nearly 5% annually over the same period.

If companies like Nissan (NSANY) and Toyota (TM - Get Report) are expected to show growth over the long-term, Ford with its impressive vehicle portfolio, attractive line-up and focus on innovation, will eventually surge ahead.

Right now, Ford pays only 36.8% of its income as dividends, which indicates the safety of its yield and that it has enough fuel in its engine to keep investors hooked.

By comparison, companies like General Motors, Toyota, Honda, and Ferrari have lower dividend yields at present.

As one waits for Ford to deliver faster sales and profit growth, the stock's dividend credentials backed by rising free cash flows makes it a surefire buy.


As we've explained Ford is an excellent income opportunity. If you're looking for other income opportunities we know another way you can add a steady stream of dividend income every month... and it's practically guaranteed by the IRS. The company signing the checks might not be one that you've heard of. However, Silicon Valley's top CEOs - think Mark Zuckerberg and Larry Page - know that its product is invaluable. Click here for the full story.

The author is an independent contributor who at the time of publication owned none of the stocks mentioned.