This article was updated on January 9, 2017, and originally published on February 1, 2015

For what felt like an eternity, Ford (NYSE:F) was a rock-solid dividend stock. With the exception of a blip between 1982 and 1983, Ford stock offered a dividend payout to shareholders continuously from 1956 to 2006 -- 50 years! 

But just before the onset of the Great Recession, the company was forced to suspend its dividend. Over the next two years, Ford stock plummeted over 80%. There was, however, a silver lining. Ford was the only automaker to make it through the recession relatively unscathed -- forgoing the government bailout that General Motors (NYSE:GM) and Chrysler needed.

Since the nadir in 2008, Ford stock has returned over 970%, and it has reinstated its dividend. So is Ford stock -- and its dividend -- safe? Read below to get the view from 30,000 feet.

The most important metric for dividend investors

If you're buying shares of a company primarily for its dividend, there's no metric more important to watch than free cash flow (FCF). This represents the total amount of money a company has put in its pocket during the year, minus any capital expenditures. At the end of the day, it is from FCF that dividends are paid.

Here's a look at what Ford stock's dividend payout has looked like since 2012 -- the first full fiscal year its dividend was reinstated.

Data source: Yahoo! Finance

The most important takeaway here is that Ford's dividend has very good coverage. What's amazing about the chart above is that the trailing 12 months (TTM) includes a massive special dividend paid last year. And yet, Ford has still only used 27% of FCF to pay it out. Even if FCF stayed exactly the same (which it probably won't), the recent decision to pay out an extra $1 billion in the form of the special dividend still leaves lots of wiggle room for management.

This tells us two things. First, if tough economic times hit or if Ford's business falters a bit, the company should be able to maintain some type of payout. In fact, Ford's CFO recently said just that.

And more important, since the payout ratio is still low, there's room for growth to continue.

But what about Ford stock?

Investing in automakers can be a tricky proposition, especially for the beginning investor. That's because the industry is largely cyclical -- meaning there are times where car sales will boom, followed by much weaker demand -- and companies can therefore be difficult to value.

In addition, companies like Ford have high fixed costs in the way of pension plans. Though the plans are less of an issue today than they were five years ago, they still represent a hefty cost for Ford.

Investors in Ford should prepare themselves for some volatility. The company recently expanded its recalls to include almost 2.4 million vehicles, which will surely affect the company's bottom line.

At the same time, management still has its eyes fixed on the long-term. It will be spending a lot of money on a number of growth initiatives. This includes devoting money to defend its market-leading line of trucks, expanding the Lincoln brand, and--most notably -investing in plug-in hybrids, self-driving technology, and explores avenues to provide "personal mobility". The latter likely includes transportation solutions that don't include actual car ownership.

As it is, Ford stock is trading for just over six times earnings and offering a 4.7% dividend yield -- both tempting numbers for long-term investors who believe the company will continue dominating market share domestically while expanding abroad. While hitting a cyclical top is something to keep an eye on, it's tough to find a cheaper company with such a strong balance sheet on the market right now.

Brian Stoffel actually drives a Toyota, so even though he thinks Ford's stock looks appealing right now, he's not a customer. He has no position in any stocks mentioned.

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