Auto manufacturer Ford Motor Co. (NYSE: F) offers a bargain stock today, with share prices coming in well below $10. The automaker has lost value in recent years as it has struggled to adapt to a changing market, higher manufacturing costs, and increased competition.
However, investors could look forward to a significant upside, especially if the company continues to focus on its electric vehicle development. The company is looking to capitalize on its biggest brand names to make the transition to electric vehicles within the next decade.
Top Models Will See Electric Versions First
Unlike other leading manufacturers like Nissan and Toyota, Ford probably won’t be releasing a new vehicle platform using electric technology. Instead, the company’s first all-electric vehicle will be based on the hugely popular F-150 pickup truck platform.
Ford is a relative newcomer to the electric vehicle market, so it will start conservatively with a hybrid F-150 in 2020. Following the release, it will focus on developing an all-electric version.
Ford is already making huge investments to bolster its technology and operational capability. In April, the company announced that it would be pouring $500 million into a Michigan based electric pickup truck startup called Rivian. Its investment should allow for technical sharing and a better understanding of the all-electric market. This is something that Ford desperately needs if it wants to compete with Tesla, as well as German and Japanese manufacturers.
In addition to the F-150, Ford is also planning an eventual release of an all-electric Mustang. Planned as a high-performance vehicle for enthusiasts and the luxury market, Ford unveiled a prototype of the new model in Las Vegas this week.
Ford is taking a unique approach that could differentiate it in the performance market. Lithium powered electric cars can be operated by a single-speed transmission, as has been seen in all the current Tesla models. Ford has developed a manual transmission that it says will put “control of the vehicle back in the driver’s hands.”
This decision could make ford extremely popular with car enthusiasts.
Is Ford a Good Investment Today?
Ford’s low stock pricing makes it a relative bargain, and its potential in the electric vehicle market is compelling. Ford will be behind the curve by the time it releases its first all-electric vehicle, but its powerful brand could help to make up some of the difference.
The dividend also comes into play. With a yield of 6.73%, it’s one of the best in the market. There’s risk in Ford, especially as it has been slow to adapt to a changing automotive market. However, it still makes sense as a long-term stock pick in a well-diversified portfolio.
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