Why Ford Investors Might Have to Say Goodbye to Its Special Dividend

Core Viewpoint - Ford's traditional dividend remains a reliable source of income for investors, but the supplemental dividend may face risks in the near term due to external financial pressures [1][9]. Group 1: Dividend Overview - Ford Motor Company's dividend yield currently exceeds 4%, and the company has a history of providing supplemental dividends as bonus payments to investors [2]. - The supplemental dividend has typically been around one extra quarterly payment annually, enhancing the overall value of Ford's dividend offerings [6]. Group 2: Recent Developments - In 2023, Ford's sale of its investment in Rivian significantly boosted its cash flow, allowing the company to issue a special supplemental dividend of $0.65 per share, in addition to its regular quarterly dividend of $0.15 per share [5]. - Despite the historical trend of supplemental dividends, Ford's cash flow is slowing, which may lead to the discontinuation of these payments [8]. Group 3: Financial Challenges - Ford is currently facing a $1 billion net tariff headwind and anticipates an additional $1 billion impact from a supplier fire, which are affecting its financial performance [7]. - The company has announced a strategic pivot away from electric vehicles, which will incur a substantial $19.5 billion charge, including $5.5 billion in cash over the next two years [8].