Legacy carmaker Ford Motor Company has been slow to keep up with new trends like electric vehicles, autonomous vehicle technology, and in-car connectivity. That’s left the shares trading at just a fraction of their former value.
But Ford still sells more than 2.4 million vehicles a year in the US and nearly 6 million globally. More than half of its US sales are high-margin trucks, too.
So, is Ford undervalued right now? In this guide, we’ll take a closer look at whether you should invest in Ford today and show you how to buy Ford shares in the UK.
Step 1: Find the Best Stock App to Buy Ford Shares UK
In order to buy Ford shares in the UK, you’ll need a stock app that offers stocks on the New York Stock Exchange (NYSE) or NASDAQ.
Many UK stock trading apps carry shares of this major global automaker. So, you can compare apps based on not just whether they offer trading on Ford stock, but also on key features like trading fees, platform features, and ease of use.
Let’s take a look at two of the top UK stock apps you can use to buy Ford shares today.
1. eToro – 0% Commission Share Trading and Investing
eToro is our top-rated stock app for buying Ford shares. This online brokerage offers trading on more than 800 US stocks, plus thousands more shares from around the globe. This means you can invest in the hottest stocks like Amazon, Gamestop and AMC. You can also invest in over 450 ETFs, including several that specifically target the global auto industry.
With eToro, you have two ways to buy Ford shares: with CFDs or by buying the shares directly. When trading CFDs, you pay no commission and you can leverage your trade up to 5:1. CFD trading is most suitable for a short-term bet on the Ford share price. Alternatively, long-term investors can buy Ford stock outright.
One of the reasons we think eToro is a great choice for both traders and investors is its social trading network. On the app, you can connect with millions of other traders to get trade ideas, share your winning trades, and learn new trading strategies. The social network also enables you to monitor market sentiment for stocks like Ford, which can indicate whether the price will move up or down.
eToro also has a robust trading platform to help you research stocks like Ford. You can access full-screen technical charts in the mobile app and overlay more than 100 technical indicators. The app also includes a news feed and economic calendar, plus research from professional analysts that points to where Ford shares could be headed a year from now.
eToro is fully regulated by the UK’s Financial Conduct Authority (FCA) and all UK accounts are insured by the Financial Services Compensation Scheme. The company also provides 24/5 phone support, which is nice to have in case you run into trouble with your account at any point.
67% of retail investor accounts lose money when trading CFDs with this provider.
2. Libertex – 0% Spread Trading with Advanced Mobile Platform
Libertex is a UK stock trading app that offers trading on dozens of stocks from around the world, including Ford. This app only allows you to trade CFDs, so it’s better suited for short-term traders than long-term investors. You have the option to leverage your position in Ford shares up to 5:1.
Libertex takes a slightly different approach to trading fees than most stock apps. Instead of charging variable spreads for CFD trades, you pay a fixed commission for Ford shares of 0.15% per trade. This is comparable to the spreads at other brokers, but knowing exactly how much you’ll pay for every trade is a nice perk.
What sets Libertex apart from the pack for us is its mobile trading platform. The Libertex stock app is extremely easy to use and puts powerful technical charts at your fingertips. You can access a news feed and economic calendar on mobile, as well as monitor traders’ sentiment around Ford shares in real time. Trade execution is extremely fast, too, which helps you stay one step ahead of the market.
One thing to note about Libertex is that it doesn’t provide the same flexibility as some other stock apps when trading. The selection of order types is limited to market, limit, and stop-loss, so you cannot set up complex trades using, for example, one-cancels-the-other orders. We don’t think most traders and investors will miss this functionality, though, and the rest of the Libertex experience is excellent.
Libertex is regulated by the Cyprus Securities and Exchange Commission (CySEC), which is widely regarded as a reliable financial watchdog.
75.3% of retail investor accounts lose money when trading CFDs with this provider.
Step 2: Analyze Ford Shares
The global auto industry is in an intense period of transition right now. Tesla is forging ahead with making electric vehicles, GM recently announced it will end sales of gasoline-powered cars by 2035, and seemingly every carmaker and tech company is racing to get self-driving vehicles on the road.
So, what does the future hold for Ford shares?
Ford Share Price UK
Ford’s share price has been gradually declining in recent years. From a price of over $17 per share in 2013, the stock entered 2020 at just above $9 per share – a slow loss of nearly 50%.
When the COVID-19 pandemic hit, Ford shares dropped precipitously. The stock hit a low of $3.96 in March. As car sales boomed in the US, however, Ford shares quickly climbed and ended last year at just under $9 apiece.
So far, 2021 has been good to Ford. The company transitioned to a new CEO, Jim Farley, in October and has been pursuing an $11 billion restructuring plan that aims to modernize the company and make it more competitive.
In addition, Ford announced a partnership with Google at the start of February. The stock briefly climbed over $12 per share on the news and has continued to trade around $10.50 to $11.
Ford Stock Fundamentals
Ford currently has a market cap of $42.4 billion, making it the third-largest US car manufacturer (after Tesla and General Motors) and the 15th largest automotive manufacturer in the world.
The company had a difficult 2020 thanks to the coronavirus pandemic, which brought supply chain challenges and a temporary shift to manufacturing ventilators. As a result, Ford barely notched any growth last year and effectively broke even on its bottom line. In 2019, the company reported a p/e ratio of 9.13, and this is expected to grow to 10.97 in 2021.
Ford Dividend Information
In the past, Ford Motor Company has paid out a quarterly dividend of $0.15 per share. At the Ford stock price at the start of 2020, this corresponded to a yield of 6.4% – and extremely attractive dividend yield.
However, the company indefinitely suspended its dividend when the COVID-19 pandemic hit. It’s not clear when Ford will reinstate its dividend, although analysts have speculated that it could happen this year. So far, there’s been no news as to whether the yield will remain above 6%, or whether Ford will lower its dividend and invest the extra cash in electric vehicles or self-driving vehicle technology.
Should I Buy Ford Shares UK?
Ford shares have been steadily gaining since the onset of the pandemic in March. To be sure, the company faces serious challenges ahead. But on the whole, we’re bullish about Ford’s future. Here’s why.
Upcoming Earnings Blowout
Ford shares jumped nearly 15% in mid-January based on analyst reports that Ford would beat expectations for its Q4 earnings report, due out this week. That seems extremely likely to happen.
The company reported earnings per share (eps) of 65 cents, compared to an expected earnings of 19 cents per share, in its last report. Despite that, analysts haven’t changed their outlook for Q4. At the same time, consumer confidence in the US recently notched to new highs.
All the lights are green for Ford right now, yet analysts are still expecting the company to report that it underperformed expectations. Look for an exuberant earnings report to drive the shares higher in the short-term.
Ford is also in the midst of a massive restructuring plan that could save the company an estimated $11 billion over the next decade. This is a huge move for a multinational automaker, and an important one if Ford wants to stay competitive in the markets it already has a strong presence in.
The company made the decision to limit operations in some countries where it’s underperforming, and to double-down on key markets in the US, China, and Southeast Asia. We think this is a great long-term move for Ford, and one that positions it to stay competitive even as competitors like Tesla and GM push hard in these markets.
Another tailwind for Ford is its strong product design cycle. The company recently released a new F-150 pickup truck – the heart of the company’s business – and it’s been getting strong reviews from industry outlets and customers.
Ford is also getting attention over its updated Bronco, to be released this year, and the Mustang Mach-E SUV. Both of these vehicles are relatively unique offerings, which could help Ford claim more market share in the US and steal sales away from Tesla.
Partnership with Google
Perhaps the biggest news from Ford recently is the company’s just-announced partnership with Google. The 6-year deal means that Ford will integrate Android Auto – which is produced by Google – into millions of its new vehicles. That should make Ford cars and trucks more attractive to consumers, who have increasingly gravitated towards Android Auto as opposed to carmakers’ in-house entertainment platforms.
At the same time, Ford will lean on Google’s cloud computing capabilities to be able to update vehicles remotely, send customers messages about trade-in opportunities, and more. This remote connectivity opens a wide range of doors for Ford to cross-sell products and make the customer experience more seamless. Once again, that represents a win for both Ford vehicle owners and Ford itself.
Step 3: Open a Stock Trading App Account
Ready to buy shares of Ford? We’ll show you how to invest using eToro, which offers 0% commission trading, a vibrant social network, and powerful trading tools.
To get started, download the eToro app from Google Play or the Apple App Store.
Once it’s installed, tap ‘Join Now’ to open a new account. You can create a new username and password or log in using your Google or Facebook accounts.
In order to comply with UK financial regulations, eToro asks you to verify your identity as part of the sign-up process. Take a photo of your passport or driver’s license and upload it through the app. You’ll also need a photo of a recent utility bill or financial statement showing your address.
Next, fund your account. eToro requires a minimum deposit of £140, which you can pay by debit or credit card, UK bank transfer, PayPal, Neteller, or Skrill.
Step 4: How to Buy Ford Shares UK: Tutorial
Now you’re ready to buy Ford shares. Tap the magnifying glass at the top of the eToro app and enter ‘Ford.’ When the company appears in the search results, tap on it. Then tap ‘Trade’ to open a new order form.
On this screen, enter the amount you want to invest in Ford stock. You can choose to set a stop-loss price or take profit price for your trade as well. If you’re trading CFDs, select whether to apply leverage up to 5:1.
When you’re ready, tap ‘Open Trade’ to buy Ford shares.
Ford Shares Buy or Sell?
Ford stock has been one of the strongest in the US stock market since being pummeled last March. The company is up 175% over the past year.
Still, we think Ford shares can move quite a bit higher.
In the short term, we expect to see extremely strong earnings from the carmaker. In a best-case scenario, Ford could even offer a timeline for reinstating its dividend – although that would be a surprise at this point. Ford has already taken advantage of the post-COVID economic recovery, and the automaker is positioning itself to pick up market share in the months ahead.
Over the long term, Ford is making headway in key technologies like electric vehicles. The launch of the Mustang Mach-E electric SUV has been a huge success, and the new partnership with Google bodes well for Ford’s ability to keep up with consumer-facing technology in its vehicles. Having the capability to make remote updates to its vehicles will also be a major plus for Ford going forward.
Overall, we think Ford is a strong buy right now. The company certainly faces some challenges, especially if Tesla continues to gain market share in the US and China. However, the automaker is doing an excellent job of making itself competitive, and that problem-solving attitude is a good sign in and of itself.
Our Verdict on Ford Shares UK
Ford may be a legacy automaker, but the company is rapidly positioning itself to be a major player in the next generation of the global auto market. The company has rapidly made huge changes, the latest of which is a partnership with Google to outfit its vehicles with Android Auto and remote updating capabilities. We see Ford as one of the strongest auto stocks to buy right now.
Ready to buy Ford shares in the UK? Click the link below to get started with eToro today!