Ford (F) returned 33.7% in 2025 and offers a 5.1% dividend yield. Ford doubled the S&P 500‘s performance while yielding four times more than the index.
Ford generated $6.7B in free cash flow through Q3 despite narrowing its EV division loss to $1.3B.
Ford trades at 8x forward earnings with analysts projecting 41% EPS growth in 2026.
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The S&P 500 is trading near its all-time high, propelled by relentless gains from the artificial intelligence (AI) boom. Year to date, the index has climbed over 16%, rewarding investors who bet on tech giants like Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT).
Yet amid this surge, dividends remain scarce among the top performers — most AI darlings reinvest profits into growth rather than payouts. Yet, there is one outlier in the 500 that is delivering a yield more than four times higher than the index’s average, while also demolishing the index with a 33.7% return in 2025 — double the benchmark’s pace: Ford (NYSE:F).
This blend of income and momentum makes Ford a rare value play in a growth-obsessed market. Let’s find out why.
The U.S. auto industry is hitting the brakes in 2025, with sales growth stalling amid affordability woes and shifting consumer tastes. November sales totaled 1.26 million units, down 8% from the prior year and flat month-over-month, pushing the full-year tally to just 16.1 million to 16.2 million units — a modest 2% rise from 2024 but far below pre-pandemic peaks.
Battery-electric vehicles (BEVs), once all the rage, saw their market share dip to 7.9% in November, reflecting the surge of buyers to gain last-minute deals on credits manufacturers off following the federal government curbing incentives. Hybrids and trucks held firmer, but overall demand softened as still-elevated interest rates squeezed budgets, forcing buyers to delay big-ticket purchases.
Ford, however, has sidestepped much of this turbulence through a pragmatic pivot. While pure EV players like Rivian (NASDAQ:RIVN) and Lucid Group (NASDAQ:LCID) grapple with losses, Ford’s Model e division scaled back aggressive spending, posting a narrower $1.4 billion loss in Q3 compared to deeper red ink in 2024. This restraint preserved Ford’s cash flow, funding a steady $0.15 quarterly dividend that yields 5.1% — far above the S&P 500’s 1.1% average.
Investors rewarded this discipline. Ford’s shares surged nearly 34% higher this year, which is on par with Nvidia (up 37%), thanks to five straight earnings beats and robust free cash flow of $5.7 billion through Q3.
Compounding the slowdown, U.S. vehicle inventories ballooned to 3.04 million units by October, up 5% from September and marking three straight monthly gains. Days’ supply crept higher, signaling overproduction as factories churn out models amid tepid demand. Discounts followed suit, averaging $3,229 per vehicle — a $221 jump from the prior month — with 48% of stock priced below MSRP to lure hesitant shoppers. EVs bore the brunt of the slowdown: incentives rose 6% month-over-month, with brands like Hyundai slashing prices by $7,000 on models like the Ioniq 5.
Ford has turned this pressure into profit. By focusing on high-margin trucks and SUVs — F-150 sales rose 4% year-over-year despite the dip — the automaker maintained pricing power, with average discounts at 8% versus the industry’s 11%. Still, its October inventory sat at 116 days’ supply, well above the industry average of 88 days, according to Cox Automotive.
Commercial vehicle demand, via the Ford Pro unit, surged 17% year-to-date, offsetting consumer softness and generating $2 billion in EBIT. Cost cuts and operational improvements contributed to Ford’s overall adjusted EBIT growth.
These moves explain the stock’s torque: trading at just 8 times forward earnings, it’s a bargain, with analysts eyeing 41% EPS growth in 2026.
Ford’s outperformance looks poised to endure into 2026, but don’t bet the farm yet. With leverage at about 15x debt-to-EBITDA — much higher than peers — the company remains vulnerable to prolonged slowdowns or EV policy whiplash. Still, at current valuations, it’s a compelling buy for income seekers. Consensus estimates suggest it is fairly priced at a target just below $13 per share, but high-end estimates suggest over 20% upside to $16 per share, even with flat sales forecasts next year.
If Ford executes on hybrids like the Maverick — up 43% in November and 12% year-to-date — and sustains cash flow above $2 billion, this dividend dynamo could keep lapping the pack. For risk-tolerant investors, Ford is still a buy.
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