Ford Motor Co

In January Ford Motor Co increased it's dividend from 5 cents a share to 10 cents, a 100% increase, which obviously goes along with our Dividend Wealth of growing your income to temper the effects of inflation.  The yield as of this this writing is 3.24%.  I can't take credit for seeing this increase in advance, however portfolio manager Michael Levine of Oppenheimer Fund runs the Oppenheimer Equity Income Fund (OAEIX) mentioned Ford in Dec of 2012.  Levine in a 2012 interview highlighted the prospects of Ford "Levine sees promise in the whole sector but says that Ford, which survived the recession without a bailout, is especially compelling. Its stock is trading at just eight times next year's earnings. Ford's shares have suffered because of skidding sales in Europe, but Levine thinks its results will improve as it shrinks its manufacturing capacity in the region. In the meantime the company offers a 1.7% dividend yield. Because it has a rock-solid balance sheet, he says, Ford has the wherewithal to bulk up its payout by at least 50% over the next year."

Several Wall Street research firms have a price target of 20 on Ford, which closed at $13.24 today.  Ford generated $1bn of cash flow in Q4 2012, which supported this Jan 2013 dividend increase.  The company has paid down $21bn of debt over the previous 24 months and appears to be executing on its turnaround.  Ford has delivered 14 consecutive quarters of profitability in North America. With gas prices around $4 a gallon in the Northeast perhaps it will drag a bit on short term performance.  Nevertheless, it's dividend and pension-derisking efforts seem to be working.  Now that Ford is returning a larger amount of cash to it's shareholders, it should attract attention to dividend wealth seekers at 3.24% yield. 

Technically speaking the stock went from just under $9 in July/August of 2012 to $14 in Jan 2013, so the stock has pulled back after a substantial run up.  On the daily chart the stock is somewhat oversold, but on the weekly chart the stock could pull back into the $11-to-$12 range, which might be an ideal entry point for longer term dividend oriented investors.