Ford Motor Credit Company

Exchange

NYSE

Sector

Capital Goods

Industry

Auto Manufacturing

Market Cap.

49.56B

Vuru Grade

49.29/100

Current Price

$12.47
-0.09 (-0.72%)

Growth Price

$28.07
Undervalued by 125.07%

Company Metrics

  • P/E 10.84
  • P/S 0.33
  • P/B 1.71
  • EPS 1.15
  • Cash ROIC 7.89%
  • Cash Ratio 0.43
  • Dividend 0.6 / 4.74%
  • Avg. Vol. 35.47M
  • Shares 3.97B
  • Market Cap. 49.56B

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

How Concerned Should Ford Motor Co. Investors Be About Sales in China?
Motley Fool - Feb 16, 2017
It's no secret that China is incredibly important to Ford Motor Company (NYSE:F): That's been covered thoroughly since the company doubled down on Asian investment in 2012.
Ford Motor Company (F) Gets Smart About Its Future - Investorplace.com
As GM Considers Europe Exit, Ford Motor Co.'s Sales Jump 11% - Fox Business
You'll Be Surprised at the Size of Ford Motor Company's War Chest
Motley Fool - Feb 12, 2017
$27.5 billion. I'll say that again: Twenty-seven point five billion dollars. That's the cash Ford Motor Company (NYSE:F) had stashed as of December 31.
How Safe Is Ford Motor Company's 4.8% Dividend? - Nasdaq
Taking a Fresh Look at Ford Motor Company (F) - StockNewsJournal
Why Ford Motor Company Thinks South America Will Improve in 2017
Motley Fool - Jan 27, 2017
Ford Motor Company (NYSE:F) has had a tough time in South America, where deep recessions in key markets like Brazil and Argentina have led to steep losses.
Why Ford Motor Company's Profit in Asia Dropped Last Quarter - Madison.com
Highlights From Ford Motor Company's Q4 - Fox Business
Why Ford Motor Company's Profit in Europe Will Drop in 2017
Motley Fool - Jan 29, 2017
Ford Motor Company's (NYSE:F) earnings in 2017 will take a hit of at least $600 million from currency effects related to Britain's vote to leave the European Union, Ford's European chief told Reuters on Friday.
Media Advisory: Details of Ford Motor Company's February 2017 US Sales ...
Business Wire (press release) - Feb 22, 2017
DEARBORN, Mich.--(BUSINESS WIRE)--Ford Motor Company (NYSE:F) will release its February 2017 U.S. sales results at approximately 9:15 a.m.
2 Critical Factors From Ford Motor Company's Q4
Motley Fool - Jan 30, 2017
Heading into the fourth quarter, investors knew that North America, as usual, would generate the vast majority of Ford Motor Company's (NYSE:F) profits. But two factors that continue to be critical for Detroit's second-largest automaker are Europe and ...
Ford's top executives slam Trump travel ban - The Detroit News
Ford Motor criticizes Trump immigration order - Reuters
Ford Motor Co. core supply manager who graduated from SUNY Canton to speak at ...
North Country Now - 22 hours ago
Mark J. Bondoni, a 1982 alumnus and global remanufacturing and core supply manager for Ford Motor Company, will present "Driving Your Future" at 4 p.m.
Ford Is Wasting $1 Billion
Seeking Alpha - Feb 17, 2017
Technological advancement in the auto industry is approaching a pace not seen since the early days of assembly line development. Electric cars and driverless vehicles are at the forefront of new innovations.
8 Interesting Facts From Ford Motor Co.'s Q4 and Full-Year Reports
Motley Fool - Feb 2, 2017
... Mark Fields in a press release. It certainly was a solid year for the folks at Ford Motor Co. (NYSE:F), excluding one-time items, but there were also quite a few interesting data points from the automaker's fourth quarter and full year that are ...
Exploring One Issue At Ford
Seeking Alpha - Feb 23, 2017
The Ford Explorer was the fifth best selling SUV in the United States last year. Ford Motor Company (NYSE:F) sold just under 250,000 Explorers in 2016.
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.

$12.47 Current Price

$28.07 Growth Price (DCF)

Undervalued by 125.07%


Growth Rate Assumed by Market: -41.14%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$-58.99 Book Price

Overvalued by 573.05%


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 $7.89 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 3.56B 3.85B 7.04B 8.97B 12.80B
divided by
Invested Capital 70.88B 71.34B 77.02B 110.49B 108.84B
Cash ROIC 5.02% 5.39% 9.15% 8.12% 11.76%

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 $23.40 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 5.66B 7.15B 3.19B 7.37B 4.61B
divided by
Stockholders' Equity 15.95B 26.38B 24.81B 28.64B 29.17B
Return on Equity 35.52% 27.09% 12.84% 25.73% 15.79%

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
2007200820092010201120122013201420152016
Free Cash Flow 11.08B -6.88B 11.48B 7.39B 5.49B 3.56B 3.85B 7.04B 8.97B 12.80B

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
2007200820092010201120122013201420152016
Cash 50.80B 39.46B 60.10B 47.25B 48.60B 52.39B 56.55B 54.37B 62.27B 38.83B
Current Assets 178.18B 147.64B 150.13B 130.62B 133.05B 142.09B 151.57B 155.05B 172.56B 108.46B
Total Assets 279.26B 218.33B 194.85B 164.69B 178.35B 190.55B 202.03B 208.53B 224.93B 237.95B
Current Liabilities 76.78B 110.83B 61.19B 60.21B 50.36B 67.28B 74.13B 77.14B 52.17B 90.28B
Total Liabilities 273.64B 235.64B 202.67B 165.36B 163.32B 174.61B 175.64B 183.72B 196.28B 208.78B
Stockholder' Equity 5.63B -17.31B -7.82B -673.00M 15.03B 15.95B 26.38B 24.81B 28.64B 29.17B
Current Ratio 2.32 1.33 2.45 2.17 2.64 2.11 2.04 2.01 3.31 1.20
TL-to-TA 0.98 1.08 1.04 1.00 0.92 0.92 0.87 0.88 0.87 0.88

Low or No Reinvestment of Profits over the past 10 years

F has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to F operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings -1.49B -16.15B -13.60B -7.04B 12.99B 18.08B 23.66B 24.56B 14.41B 15.63B
Retained Earnings Growth - -987.21% 15.77% 48.25% 284.50% 39.21% 30.87% 3.80% -41.30% 8.46%

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 $3.01 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income -2.72B -14.67B 2.96B 6.56B 20.22B 5.66B 7.15B 3.19B 7.37B 4.61B
divided by
Revenue 172.46B 146.28B 118.31B 128.95B 136.26B 134.25B 146.92B 144.08B 149.56B 151.80B
Net Profit Margin -1.58% -10.03% 2.50% 5.08% 14.84% 4.22% 4.87% 2.21% 4.93% 3.03%

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.

$23.86 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
2007200820092010201120122013201420152016
Gross Profit 29.20B 17.30B 18.29B 24.50B 136.26B 21.67B 21.68B 17.86B 23.06B 25.22B
divided by
Revenue 172.46B 146.28B 118.31B 128.95B 136.26B 134.25B 146.92B 144.08B 149.56B 151.80B
Gross Margin 16.93% 11.83% 15.46% 19.00% 100.00% 16.14% 14.76% 12.40% 15.42% 16.61%

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.

113.81% 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
2007200820092010201120122013201420152016
Capital Expenditure 6.02B 6.70B 4.56B 4.09B 4.29B 5.49B 6.60B 7.46B 7.20B 6.99B
divided by
Net Income -2.72B -14.67B 2.96B 6.56B 20.22B 5.66B 7.15B 3.19B 7.37B 4.61B
Capital Expenditure Ratio -221.15% -45.64% 153.98% 62.41% 21.23% 96.89% 92.29% 234.24% 97.63% 151.77%

Good Dividend History over the past 10 years

F has distributed dividends for the past 5 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
2007200820092010201120122013201420152016
Dividend Paid - - - - - 763.00M 1.57B 1.95B 2.38B 3.38B
divided by
Shares Outstanding 1.98B 2.27B 2.99B 4.18B 4.11B 4.02B 4.09B 4.05B 4.00B 3.96B
Dividend Paid Per Share - - - - - 0.19 0.39 0.48 0.59 0.85
Price at Year End 6.67 2.28 9.95 16.62 10.72 12.87 15.28 15.50 14.17 12.13
Dividend Yield - - - - - 1.48% 2.52% 3.11% 4.20% 7.03%

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
2007200820092010201120122013201420152016
Shares Outstanding 1.98B 2.27B 2.99B 4.18B 4.11B 4.02B 4.09B 4.05B 4.00B 3.96B
Stock Bought Back - -12.93% -24.03% -28.39% 1.63% 2.39% -1.76% 1.04% 1.07% 1.11%
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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.