Trusted for 10 years... Ford (F) 'Crushingly Defeated' by S&P 500 ETF in Returns

▲ Ford (F), S&P 500 ETF/AI generated image

If you had invested $10,000 in Ford Motor Company (F) ten years ago, your investment would have grown to $18,700. However, if you had bought an S&P 500 ETF with the same amount of money, you could have made a much larger profit. The growth limitations hidden behind Ford's high dividend yield and low price-to-earnings ratio became clearly apparent in its 10-year investment performance.

According to Yahoo Finance on July 3 (local time), Ford has been a company leading the U.S. automotive industry for over 100 years since 1903. While its annual revenue is projected to reach $187 billion in 2025, long-term shareholders have not necessarily outperformed the market average.

From July 1, 2016, to July 1, 2026, the total return on Ford stock was 87%. An investment of $10,000 ten years ago would have grown to $18,700. During the same period, the S&P 500 ETF recorded a total return of 323%, showing a 236 percentage point difference compared to Ford.

Ford stock's low valuation and dividends are factors that attract investors. Ford's estimated price-to-earnings ratio is 8.3x, and its dividend yield is 4.4%. However, the media pointed out that investors seeking market-beating returns should reconsider including Ford in their portfolios.

The problem lies in the structural limitations of the automotive business. Ford's business characteristics include low growth rates and low profit margins, and the mass-market automotive industry is highly competitive and requires massive capital expenditures. Demand also has a strong cyclical nature, moving sensitively with economic trends.

The media predicts that Ford's underperformance relative to the market will continue over the next 10 years. While a 4.4% dividend yield and an estimated price-to-earnings ratio of 8.3x are attractive figures, growth rates and profit margins, which determine long-term investment performance, remain key challenges for Ford to address.

[Article Key Summary]

-If $10,000 was invested in Ford 10 years ago, the asset value increased to $18,700, recording a total return of 87%.

-During the same period, the S&P 500 ETF's total return was 323%, which was 236 percentage points higher than Ford's.

-Ford recorded an estimated price-to-earnings ratio of 8.3x and a dividend yield of 4.4%, but low growth rates and profit margins were cited as burdens on long-term returns.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*