Is Ford Stock a Buy Now?

Neil Patel, The Motley Fool

Sat, Jun 28, 2025, 8:30 AM 4 min read

• Its Pro segment is seeing good growth prospects, a double-digit operating margin, and recurring revenue stream.

• Economic conditions, tariffs, and labor disputes are some external factors that can have a huge impact on Ford.

• While the stock looks cheap, Ford stock's track record points to market underperformance going forward.

• 10 stocks we like better than Ford Motor Company ›

Technology companies seem to get all the attention these days. But it's best not to forget well-known businesses in other industries that are also important to the economy. Detroit automaker Ford Motor Company (NYSE: F) is one of them.

Having been around since 1903, this company has become a leader in its industry. But is Ford stock a buy now? Investors will be able to make a better decision after assessing both the bull and bear cases.

One of the biggest critiques of investing in car companies is that they don't lend themselves to repeat purchase behavior from consumers. That's the case with an expensive item. This is in stark contrast to businesses that sell products and services that are low-cost and bought at frequent intervals. Consequently, Ford could experience lumpy demand.

Management is aiming to change things. Its Ford Pro segment, which sells vehicles, software, and services to commercial and government clients, is a bright spot. It posted revenue growth of 15% in 2024, with a 13.5% operating margin that's much higher than the company overall.

Ford Pro had 675,000 subscriptions as of March 31, a figure that soared 20% year over year. "Ford Pro Intelligence continues to drive recurring high margin, non-cyclical revenue," CFO Sherry House said on the fourth-quarter 2024 earnings call. Ford Pro Intelligence is a cloud platform that allows customers to manage their vehicles.

The dividend is an obvious reason why investors would want to buy Ford shares. The current dividend yield is 5.73%, which is a sizable payout that certain investors will find very compelling.

Of course, this also implies that the stock is cheap. As of June 25, shares trade at a price-to-earnings ratio of 8.4. If Ford's valuation multiple somehow gets back to its trailing-five-year average of 10.1, there is already 20% upside to the stock.

I believe that a good starting point to find winning stocks is to look at companies whose shares have performed well in the past. Unfortunately, Ford doesn't fit the bill. Since June 2015, Ford stock has generated a total return of 19%. This gain, which includes the dividend, seriously lags the S&P 500 index and its 245% total return. I'm not very confident that this trend will change.