Ford Dividend: Safe Despite Losses?

Ford's regular dividend, which costs about $2.35 billion annually, seems well-covered for 2026, with the company raising its adjusted free cash flow guidance to between $6 billion and $7 billion. This guidance suggests coverage for the dividend approximately 2.6 to 3.0 times over. The automaker reported a $1.3 billion net loss in the second quarter, primarily due to a $3.6 billion special item charge related to the sale of its BlueOval SK battery joint venture.

Despite the paper losses, Ford generated $2.5 billion in adjusted EBIT and $2.1 billion in adjusted free cash flow during the same quarter. The company also boasts substantial liquidity, with $22.3 billion in cash and $43.4 billion in total liquidity. Ford's CFO, Sherry House, reiterated the company's commitment to its investment-grade rating and returning capital to shareholders.

However, risks persist, including a debt-to-equity ratio of 4.66, expected losses from the Model e division, and disruptions from Novelis aluminum. Ford's dividend history shows past cuts, with payments ceasing in early 2020 before resuming in late 2021. The company's next earnings report on October 28, 2026, will be crucial for investors monitoring the free cash flow target, order recovery, and progress on remaining cash charges.