Ford Motor Credit Company

Exchange

NYSE

Sector

Capital Goods

Industry

Auto Manufacturing

Market Cap.

49.00B

Vuru Grade

55.97/100

Current Price

$12.34
+0.0677 (+0.5517%)

Growth Price

$28.62
Undervalued by 132.00%

Company Metrics

  • P/E 12.9871
  • P/S 0.3173
  • P/B 1.5115
  • EPS 0.95
  • Cash ROIC 8.66%
  • Cash Ratio 0.41
  • Dividend 0.6 / 4.89%
  • Avg. Vol. 35.64M
  • Shares 3.97B
  • Market Cap. 49.00B

Company Description

Ford Motor Company primarily develops, manufactures, distributes, and services vehicles and parts worldwide. It operates in two sectors, Automotive and Financial Services. The Automotive sector offers vehicles primarily under the Ford and Lincoln brand names. This sector markets cars, trucks, and parts through retail dealers in North America, and through distributors and dealers outside of North A... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

There is no news available at this time.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for F to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate F's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$12.34 Current Price

$28.62 Growth Price (DCF)

Undervalued by 132.00%


Growth Rate Assumed by Market: -48.95%


Future Free Cash Flow Growth Rate: 2.6%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$-78.46 Book Price

Overvalued by 735.93%


Poor Cash Return on Invested Capital over the past 5 years

F has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

F has only created $8.66 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20132014201520162017
Free Cash Flow 3.85B 7.04B 8.97B 12.80B 11.05B
divided by
Invested Capital 71.34B 77.02B 110.49B 108.84B 124.28B
Cash ROIC 5.39% 9.15% 8.12% 11.76% 8.89%

Excellent Return on Equity over the past 5 years

Over the past 5 years, F has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

F has generated $20.67 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20132014201520162017
Net Income 7.15B 3.19B 7.37B 4.61B 7.63B
divided by
Stockholders' Equity 26.38B 24.81B 28.64B 29.17B 34.89B
Return on Equity 27.09% 12.84% 25.73% 15.79% 21.86%

Excellent Business Performance over the past 10 years

F has been able to maintain profitability in good times and bad. This could mean F has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

F has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Free Cash Flow -6.88B 11.48B 7.39B 5.49B 3.56B 3.85B 7.04B 8.97B 12.80B 11.05B

Weak Balance Sheet

F's financial position is not ideal. The key is to check whether F is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Cash 39.46B 60.10B 47.25B 48.60B 52.39B 56.55B 54.37B 62.27B 38.83B 38.93B
Current Assets 147.64B 150.13B 130.62B 133.05B 142.09B 151.57B 155.05B 172.56B 108.46B 115.90B
Total Assets 218.33B 194.85B 164.69B 178.35B 190.55B 202.03B 208.53B 224.93B 237.95B 257.81B
Current Liabilities 110.83B 61.19B 60.21B 50.36B 67.28B 74.13B 77.14B 52.17B 90.28B 94.60B
Total Liabilities 235.64B 202.67B 165.36B 163.32B 174.61B 175.64B 183.72B 196.28B 208.78B 222.92B
Stockholder' Equity -17.31B -7.82B -673.00M 15.03B 15.95B 26.38B 24.81B 28.64B 29.17B 34.89B
Current Ratio 1.33 2.45 2.17 2.64 2.11 2.04 2.01 3.31 1.20 1.23
TL-to-TA 1.08 1.04 1.00 0.92 0.92 0.87 0.88 0.87 0.88 0.86

Consistent Reinvestment of Profits over the past 10 years

F has consistently retained profits. This may put F in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, F can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Retained Earnings -16.15B -13.60B -7.04B 12.99B 18.08B 23.66B 24.56B 14.41B 15.63B 21.22B
Retained Earnings Growth - 15.77% 48.25% 284.50% 39.21% 30.87% 3.80% -41.30% 8.46% 35.72%

Highly Competitive Industry over the past 10 years

It's likely that F is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely F invests heavily in R&D and Sales, General & Administrative expenses.

Only $3.65 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Net Income -14.67B 2.96B 6.56B 20.22B 5.66B 7.15B 3.19B 7.37B 4.61B 7.63B
divided by
Revenue 146.28B 118.31B 128.95B 136.26B 134.25B 146.92B 144.08B 149.56B 151.80B 156.78B
Net Profit Margin -10.03% 2.50% 5.08% 14.84% 4.22% 4.87% 2.21% 4.93% 3.03% 4.87%

Inconsistent Gross Profit Margins over the past 10 years

F has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$23.79 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Gross Profit 17.30B 18.29B 24.50B 136.26B 21.67B 21.68B 17.86B 23.06B 25.22B 25.44B
divided by
Revenue 146.28B 118.31B 128.95B 136.26B 134.25B 146.92B 144.08B 149.56B 151.80B 156.78B
Gross Margin 11.83% 15.46% 19.00% 100.00% 16.14% 14.76% 12.40% 15.42% 16.61% 16.23%

High Capital Intensity over the past 10 years

F spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

111.43% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Capital Expenditure 6.70B 4.56B 4.09B 4.29B 5.49B 6.60B 7.46B 7.20B 6.99B 7.05B
divided by
Net Income -14.67B 2.96B 6.56B 20.22B 5.66B 7.15B 3.19B 7.37B 4.61B 7.63B
Capital Expenditure Ratio -45.64% 153.98% 62.41% 21.23% 96.89% 92.29% 234.24% 97.63% 151.77% 92.41%

Good Dividend History over the past 10 years

F has distributed dividends for the past 6 years. Remember, the longer a company's dividend history, the more established the company might be and the more reliable the future of the dividend probably is.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Dividend Paid - - - - 763.00M 1.57B 1.95B 2.38B 3.38B 2.58B
divided by
Shares Outstanding 2.27B 2.99B 4.18B 4.11B 4.02B 4.09B 4.05B 4.00B 3.96B 4.00B
Dividend Paid Per Share - - - - 0.19 0.39 0.48 0.59 0.85 0.65
Price at Year End 2.28 9.95 16.62 10.72 12.87 15.28 15.50 14.17 12.13 11.01
Dividend Yield - - - - 1.48% 2.52% 3.11% 4.20% 7.03% 5.87%

History of Stock Buybacks over the past 10 years

F has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Shares Outstanding 2.27B 2.99B 4.18B 4.11B 4.02B 4.09B 4.05B 4.00B 3.96B 4.00B
Stock Bought Back - -24.03% -28.39% 1.63% 2.39% -1.76% 1.04% 1.07% 1.11% -1.00%
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Discussion
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3
Posted by pbanik  (on July 5, 2012)
Disclosure: I own shares of F.

I calculated the book value of F to be approximately $4.35/share based on the total stockholders equity for the 1st quarter of 2012, and 3816666667 shares outstanding. I say approximately because I don't have the Quarter 2 data for 2012 yet. The price/book value ratio, based on the $9.60/share price, is about 2.21 rounded off.
The industry average is 8.5, while the S&P average is 14.6, leading me to conclude F is undervalued.

Ford To Add 12,000 Workers: An All-American Comeback Story
http://finance.yahoo.com/blogs/daily-ticker/ford-add-12-000-workers-american-comeback-story-121822365.html
0
Posted by captaincapital  (on March 21, 2012)
Ford has been doing a great job putting in new features and overhauling its vehicles. Things like regenerative breaking (helps fuel efficiency), Microsoft SYNC, blindspot monitoring and more have consumers coming back to a brand they loved.

I think it's fair to say that F is currenlty around its intrinsic value. I'd probably buy if it dropped 30%+.

The only issue for me is the investigation into the Ford Taurus. the National Highway Traffic Safety Admin opened it this past month about the accelerators sticking. It's specifically for 2005 and 2005 models and if the vheicles are found defective, 360,000 cars would have to recalled...

Maybe that'll cause the price drop... we'll see.