The automotive landscape has undergone a seismic shift over the last half-decade, leaving legacy manufacturers like Ford Motor Company to navigate a treacherous path between internal combustion history and an electric future. For investors who placed a thousand-dollar bet on the Blue Oval five years ago, the journey has been anything but a smooth ride. Examining the returns on such an investment reveals a complex story of dividend reliability, pandemic-era disruptions, and the immense capital requirements of the modern EV transition.
Five years ago, Ford was a company in the midst of a significant leadership transition and a massive restructuring plan dubbed ‘Smart Redesign.’ At that time, the stock was trading in a range that reflected investor skepticism regarding the company’s ability to compete with high-growth tech rivals. A one-thousand-dollar investment in 2019 would have purchased roughly one hundred shares, depending on the specific entry point. Since then, the automotive industry has been hit by a global pandemic that shuttered factories, a semiconductor shortage that crippled production lines, and an aggressive push toward electrification that has cost the company billions in research and development.
Today, that initial investment tells a tale of resilience rather than explosive growth. While Ford’s stock price has experienced dramatic peaks, including a surge in early 2022 when optimism regarding the Mustang Mach-E and F-150 Lightning was at its zenith, the price has largely retreated to more modest levels. However, focusing solely on the share price ignores the primary reason many institutional and retail investors hold Ford: the dividend. Throughout much of this period, excluding a temporary suspension during the height of the COVID-19 uncertainty, Ford has maintained a robust dividend yield that significantly pads the total return for long-term holders.
When accounting for dividend reinvestment, a thousand-dollar stake from five years ago would likely be worth slightly more than the principal today, outperforming a simple cash holding but lagging significantly behind the broader S&P 500 or the tech-heavy Nasdaq. This underperformance highlights the struggle of legacy automakers to achieve the high valuation multiples granted to pure-play electric vehicle companies. Ford has had to fund its expensive transition to electric power using the profits from its internal combustion engine business, specifically the high-margin F-Series trucks and commercial van segments. This ‘two-speed’ business model has created a ceiling on the stock price as investors weigh the reliable profits of the present against the uncertain margins of the future.
Furthermore, the labor landscape has shifted the financial calculus for Ford. The recent agreements with the United Auto Workers have introduced higher labor costs that the company must now offset through increased efficiency and technology integration. For the investor who has held on since 2019, these headwinds are a reminder that the automotive sector is capital-intensive and highly sensitive to macroeconomic shifts. Interest rate hikes over the last two years have also played a role, making car loans more expensive for consumers and potentially cooling demand for Ford’s premium vehicle trims.
Looking ahead, the value of a five-year-old Ford position will depend largely on the success of the Ford Pro commercial division and the company’s ability to narrow the losses in its Model e electric unit. CEO Jim Farley has been vocal about the need to reduce complexity and improve quality to boost the bottom line. While the past five years may not have turned a thousand dollars into a fortune, they have proven that Ford can survive existential global crises while continuing to return value to shareholders through cycles of immense change. For the patient investor, the next five years will be the true test of whether Ford can finally close the valuation gap with its more modern competitors.
