Here's How Many Shares of Ford You Should Own to Get $500 in Yearly Dividends

Core Viewpoint - Ford Motor Company's stock has experienced a significant decline of nearly 26% over the past year, resulting in a high dividend yield of 6.5% based on its recent closing price of $9.14 per share, which could increase to 8.2% when including a special dividend of $0.15 per share [1][2]. Dividend Yield and Investment Potential - The current dividend yield of 6.5% is substantial for a cyclical stock, allowing income investors to potentially earn $500 annually by investing approximately $7,623 to purchase 834 shares at the April 11 closing price [2]. - If Ford issues another special dividend, the annual dividend income could exceed $500, as the company has previously paid supplemental dividends of $0.15, $0.18, and $0.65 per share in the last three years [3]. Dividend Safety Concerns - Ford's projected adjusted free cash flow (FCF) for 2025 is estimated to be between $3.5 billion and $4.5 billion, a decrease from $6.7 billion the previous year, raising concerns about the sustainability of its dividend payout, which is targeted at 40% to 50% of FCF [4]. - Given the potential shortfall in FCF to cover the annualized dividend of $0.60 per share, there is a possibility that Ford may need to temporarily cut its dividend to manage financial pressures, although immediate action may not be taken [4]. Cost Management Strategies - Despite the challenges posed by tariffs and trade tensions, Ford manufactures 80% of its vehicles in the U.S. and maintains a significant cash reserve, which may allow the company to defer some growth expenditures and preserve cash for dividend payments [5].