Buy This High-Yield Dividend Stock Over 5%, Avoid Another
Investors often seek dividend stocks for long-term wealth accumulation. These stocks are vital for stability and have historically outperformed their non-dividend-paying counterparts. However, not all high-yield dividend stocks are equal. This article discusses why investors should favor Ford Motor Company and avoid Stellantis.
Ford Motor Company: A Strong Dividend Stock Over 5%
Ford Motor Company (F) is a leading global automotive manufacturer, recognized for its trucks, SUVs, and cars. The company is divided into three core segments:
- Ford Blue: Traditional gas-powered and hybrid vehicles
- Model-e: Electric vehicle (EV) line-up
- Ford Pro: Commercial vehicle business
Ford Pro is the standout segment, generating significant earnings with a margin much higher than its peers. For instance, Ford Pro reported an earnings before interest and taxes (EBIT) of $9 billion in 2024, achieving an impressive EBIT margin of 13.5%. On the other hand, the Model-e segment suffered a loss of $5.1 billion.
Ford Blue earned $5.3 billion with a 5.2% EBIT margin, while the commercial sector outperformed expectations. Ford Pro’s robust results are bolstered by software and service subscriptions, which have surged by 24% year-over-year, reaching 757,000 subscriptions.
Ford’s overall strategy focuses on leveraging its established segments while optimizing Ford Pro to mitigate losses from Model-e. The company is currently offering a generous dividend yield of 5%, along with an annual supplemental dividend from excess cash flow.
Key Financials of Ford
| Market Cap | Current Price | Day’s Change | 52-week Range |
|---|---|---|---|
| $55 billion | $13.84 | +12.16% | $8.44 – $13.97 |
Stellantis: A Dividend to Avoid
Stellantis (STLA) recently appointed CEO Antonia Filosa in June 2025 to spearhead its turnaround efforts. However, the company faces significant challenges and uncertainty, particularly regarding its profit forecasts.
In April 2025, Stellantis suspended its earnings guidance due to a profit drop and concerns regarding tariffs from the previous administration. Despite a plan to ramp up U.S. production by 50% and launch five new vehicles, profitability remains a pressing issue.
Stellantis’ success hinges on its ability to manage its 14 brands and enhance relationships with suppliers and dealerships. Analysts have pointed out that factory capacity utilization in North America and Europe hovers between 50% and 60%, indicating inefficiencies in operations.
Key Financials of Stellantis
| Market Cap | Current Price | Day’s Change | 52-week Range |
|---|---|---|---|
| $31 billion | $10.88 | +1.11% | $8.39 – $14.28 |
Conclusion: Choose Wisely in the High-Yield Dividend Space
In summary, while both Ford and Stellantis may appear attractive in dividend screening, their financial health tells a different story. Ford presents a clear growth trajectory and reliable income with its high-yield dividend of over 5%. Conversely, Stellantis grapples with profitability issues and uncertainty in leadership. For income-focused investors, Ford Motor Company is the preferable choice for high-yield dividends. Avoiding Stellantis is advisable due to its ongoing struggles.
