While the Detroit auto stock posted a positive total return, it lags the overall market.
Thanks to its long history as one of the leaders of the domestic auto industry, Ford Motor Company (F +1.67%) is a company that investors are familiar with. Though, this doesn’t mean it has been a wildly successful addition to portfolios.
If you’d invested $1,000 in Ford shares exactly five years ago, here’s how much you’d have today.
Image source: Getty Images.
Ford is a market underperformer
Ford produced a total return of 63% in the past five years (as of Feb. 17). This means that a $1,000 investment would be worth $1,630 today. The gain lags the S&P 500 index, which put up a total return of 87%.
Let’s look at the positive and negative developments that have influenced this automotive stock over the past half-decade.
The good
Ford has maintained its leadership position atop the market for pickup trucks. Last year was the 44th straight year that the F-Series lineup was the best-selling vehicle in America. These vehicles have pricing power and support high margins for the company.
Ford pro, the segment that sells cars, software, and services to commercial and government customers, was a notable bright spot. Its growth and profitability are generally better than that of the overall business. And it introduces a recurring revenue stream.
Besides 2022, the business generated positive free cash flow each year over the past half-decade. That supports Ford’s ongoing dividend, which currently yields 4.25%. Income investors might find this compelling.
Today’s Change
(1.67%) $0.23
Current Price
$14.01
Key Data Points
Market Cap
$56B
Day’s Range
$13.72 – $14.04
52wk Range
$8.44 – $14.50
Volume
68M
Avg Vol
59M
Gross Margin
6.52%
Dividend Yield
4.28%
The bad
On the other hand, there were many negative trends that Ford has had to deal with.
Its electric vehicle (EV) segment, called model e, is one clear example. Billions upon billions of dollars in operating losses and weaker-than-expected demand finally forced the management team to shift its focus toward lower-priced EV models and hybrid vehicles. In December, Ford reported a monster $19.5 billion related charge.
Quality issues continue to plague this company. Ford had 152 recalls last year. Warranty costs have also been elevated.
Changing trade policies impacted the entire sector last year. Tariffs had a negative $2 billion impact on Ford in 2025. And they’ll continue to pressure earnings this year.
Investors shouldn’t expect things to change
It’s not encouraging for investors to see that Ford shares don’t have a history of beating the market. I believe this trend will continue over the next five years and beyond. That’s because revenue and profit growth in the long run won’t be anything to write home about. That’s the nature of being a mass market car manufacturer.
The stock is cheap, but Ford isn’t likely to register impressive returns.
