The stock, Ford Motor Company (F), seems relatively cheap. It boasts $38 billion in cash, P/E<6 and a dividend yield at 5.70%. It grossed over $155 billion for 2017 and seems that it will continue to earn on average $7 billion annually, after tax. Ford has a huge debt burden of approximately $209 billion but considering its been around for 115 years and has never gone bankrupt, we believe it will continue to service its debt and pay current yields.
General Motors (GM), which had a net loss for 2017, has approximately $18 billion in cash and a dividend yield at 3.67%. It grossed over $145 billion for 2017. GM has approximately $176 billion in total debt and has been around for 109 years, similar to Ford. We believe it will continue to service its debt and pay current yields however, it has been in financial turmoil.
Tesla (TSLA), which achieved another major net loss, does not seem worth its over $53 billion valuation. It has $3.3 billion in cash and sports no dividend yield. It grossed over $11 billion for 2017. Tesla has $23 billion in total debt and isn’t even 15 years old yet. Considering it yields nothing, it may have trouble servicing its obligations given its current operation.
If you wanted to invest your capital in the American auto industry, Ford seems cheap.
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