Name five electric vehicle manufacturers off the top of your head. Now, be honest: did you include The Ford Motor Company (F) on your list?
You should have. Ford might have a reputation as an old-school American automaker, but there’s more to the company’s story than that.
Folks who wish to invest in the electric vehicle market should seriously consider diversifying with some Ford stock. After all, there is an element of safety in Ford, which has been around for generations. (See Ford stock charts on TipRanks)
Besides, when the White House appears to be backing the company in which you are investing, that’s a good sign that you’re probably on the right track.
A Quick Look at F Stock
One word that could best describe Ford stock, year after year, is “value.”
Consider this: Ford’s trailing 12-month price-to-earnings ratio is 16.1. Not too many automakers – especially ones that offer electric vehicles – are trading at such a low valuation multiple nowadays.
In the interest of fairness, it should be reported that Ford’s shareholders won’t currently collect a dividend. Hopefully, that situation will change as the company recovers from the economic fallout of the COVID-19 pandemic.
Now, let’s delve into the stock’s price action. A 52-week high of $16.45 was reached not too long ago, on June 4.
That might have been too much, too soon. Since topping out in early June, F stock has eased back to the $14 area.
Truly, it’s hard to beat Ford stock for low volatility and high value. Even after a strong performance in 2021’s first half, it’s entirely possible to buy F shares and hold them with confidence that the price can continue to move higher.
No Turning Back
August 5 was a momentous day, no doubt, as U.S. President Joe Biden announced an ambitious goal for the nation’s major automakers.
Specifically, the president set a goal for America to have one-half of all vehicles sold in the country be emissions-free by the end of the decade.
It’s probably not a coincidence that this was happening while the U.S. Senate was pushing through a massive infrastructure bill. Perhaps Biden is looking to “strike while the iron is hot,” so to speak.
The president was dramatic in his comments surrounding the big announcement.
“The future of the American auto industry is electric,” he said. “It is electric; there’s no turning back.”
Biden wasn’t alone when he made these comments. Standing near the president were representatives from some of the U.S.’s biggest automakers – including, notably, Ford president and CEO Jim Farley.
Sorry, Elon
Just as important as who was there, is who wasn’t there.
Strikingly, Tesla (TSLA) founder Elon Musk wasn’t standing by Biden’s side during the announcement.
There wasn’t any specific news indicating that Musk was or was not invited, but his absence spoke volumes.
After all, this was a historic event that will impact America’s clean-energy vehicle manufacturers. Maybe it wasn’t a deliberate snub to Musk, but at the very least, it’s a reminder that Tesla isn’t the only electric vehicle disruptor in town.
There was even a Ford F-150 Lightning spotted behind Biden as he spoke on that day.
Musk’s response may have suggested a hint of consternation. “Yeah, seems odd that Tesla wasn’t invited,” he posted on a social media account.
Meanwhile, Ford is indubitably on board with Biden’s plan, as the company expects 40% of its global vehicle volume to be all-electric by the year 2030.
Wall Street Weighs In
According to TipRanks’ analyst rating consensus, F is a Moderate Buy, based on eight Buy, five Hold, and one Sell ratings. The average Ford price target is $16.16, implying 16.01% upside potential.
The Takeaway
There’s nothing wrong with wanting to invest in the electric vehicle revolution. Owning Tesla stock is one way to do this.
Yet, it’s not the only way. There’s a perfectly investable company that’s also heavily involved in electric vehicles, and it’s backed by none other than the White House.
That company’s name is Ford, and it deserves your attention.
Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
