Is Ford Stock a Buy Now?

Investors might be worried because the S&P 500 index is down 7% so far in 2025 (as of April 24). There's a general level of fear out there, specifically about the direction the economy is headed in. In fact, more people are expecting a recession to happen.

Ford Motor Company (NYSE: F) has been a bright spot. Its shares have climbed 1% this year, dramatically outperforming the broader index. However, there's been no shortage of volatility. Maybe the market is giving you a sign to take a closer look at Ford.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Should investors buy this automotive stock right now?

Driving recurring revenue

Ford's management team is very optimistic about one segment in particular. Ford Pro, which sells vehicles and services to commercial and government customers, stands out. Revenue was up 15% in 2024, boosted by a 27% jump in subscriptions. It reported a 13.5% operating margin, which is much better than the business overall.

Executives tout the nature of demand within this division. "I have never in my 40 years, had a chance to have reoccurring revenue where the company is not as susceptible to economic cycles and gas prices, and we can do that with Ford Pro," CEO Jim Farley said on the Q4 2024 earnings call. The segment is forecasting $7.5 billion to $8 billion in operating income for 2025.

So many reasons to be bearish

Ford has been around for more than a century. It's important to the American economy, as the company has a massive workforce of nearly 90,000 employees in the U.S. Some might even call it a cultural icon.

However, there are many negative attributes to consider that indicate this is a low-quality business. In the past 10 years, Ford's return on invested capital has averaged a disappointing 2.6%. Investors need to see a much higher number here, as it indicates the presence of an economic moat. Evidently, Ford doesn't possess durable competitive advantages.

Investors should realize that the company's long-term growth prospects aren't anything to write home about. Total vehicle unit sales in the U.S. in March were about the same as exactly 20 years before, showcasing just how mature the industry is.

We also can't ignore external forces. For example, tariffs will surely impact Ford's cost structure. This will lead to higher prices for consumers, which could pressure sales. What's more, the state of the economy can have a direct effect on demand for new car purchases, making Ford's business cyclical.

There are also occasional issues with unionized workers who demand better pay. Ford has to constantly deal with problems completely outside of its control.

Looking at the stock

You've heard the statement about past results not providing a guarantee for future returns. Said differently, investors shouldn't necessarily look at a stock's historical performance to figure out what might happen going forward. That's because companies might always be changing and adapting, with the intention of trying to position themselves for better days ahead.

As previously mentioned, however, Ford carries a lot of troubling characteristics. And I have a high confidence this is still unfortunately going to be the case decades from now.

That gives investors plenty of reason to be pessimistic. In the past decade, Ford has generated a total return of 6%. This pales in comparison to the 204% total return of the S&P 500. There's no reason to believe this trend is going to change.

It's worth mentioning that Ford's P/E ratio of 6.9 is very cheap. Consequently, the company pays a hefty dividend yield of 6%. But if you expect to outperform the market, this is a stock that should be avoided. Only income investors might find Ford worth potentially buying today.

Should you invest $1,000 in Ford Motor Company right now?

Before you buy stock in Ford Motor Company, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ford Motor Company wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.