Ford hikes quarterly dividend by 20% to 15 cents a share

Article by Christian A., on January 12, 2015

Ford Motor Co. has increased its quarterly dividend by 20 percent from 12.5 cents a share to 15 cents, despite a warning that profit would drop for 2014. The carmaker restored the dividend in 2012 at 5 cents after suspending it for over five years. Ford said the dividend is payable March 2, 2015, to shareholders of record at the close of Jan. 30, 2015.

Ford chief executive Mark Fields remarked to investors in September that the carmaker’s pretax profit for 2014 would fall short of the $7 billion-$8 billion target to just $6 billion – no thanks to higher recall costs and deepening losses abroad, as well as spending to launch the MY2015 aluminum-bodied F-150 pickup.

The manufacturer has said it remains committed to regularly raising the dividend, adding that the increase is consistent with its strategy. Chief Financial Officer Bob Shanks said in September that Ford is planning to continue to increase regular dividends up to the point “that we don’t believe this is sustainable.”

He added that the Ford has not reach the point where it has reached the level where it is not sustainable over a downturn.

The 15-cent dividend means that the founding family, which holds 70.9 million Class B shares, would be paid $42.5 million annually. Family members, including Executive Chairman Bill Ford, hold 40 percent voting power at the carmaker.

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