After more than a century, Ford Motor Company (NYSE:F) is on course for a dramatic transformation. CEO Mark Fields has a plan to position Ford for the new era of mobility in a way that could boost its profit substantially over time. 

With a dividend yield around 4.7% and a price of just over 7 times its adjusted 2016 earnings, Ford is already on some investors' radar as a value-priced dividend play. But if Fields' plan is for real, it could be a significant profit-growth story over the next several years as well.

Is it? Let's take a look. 

A red Ford Super Duty pickup outside Ford's Kentucky Truck Plant.

Pickups like the new Super Duty drive Ford's profits today. They'll help fund the businesses that will drive Ford's profits in the future. Image source: Ford Motor Company.

Ford's plan to boost profits as the industry transforms

Fields summed up the plan elegantly during Ford's fourth-quarter earnings call:

Our plan is simple: We want to achieve top-quartile returns by expanding our scope from vehicles to mobility through business model innovation. I can tell you we're more focused than ever before on fortifying our strengths, transforming the underperforming parts of our business and investing in emerging opportunities that will provide even more profitable growth in the future for us. 

This graphic is Ford's one-page summary of its plan.

A graphic summarizing Ford's transformation strategy.

Image source: Ford Motor Company.

It looks complicated, but the important part is the "strategic priorities" line near the bottom. The important takeaway is that Ford is working to boost the profitability of its current business while it simultaneously builds even more profitable new businesses enabled by technology. 

Making Ford's traditional business more profitable

Looking at the slide, going left to right, we can see that the plan starts with the fortification of what Ford calls its "profit pillars." These are parts of Ford's current business where it feels it has a leadership position. Not coincidentally, they're all big profit generators:

In each area, Ford is investing in new products and services that build on its existing portfolio and strengths. Examples are easy to find: The new Super Duty pickups, the refreshed-for-2018 Mustang, and its new Omnicraft line of parts for non-Ford vehicles are all part of this push. 

A 2017 Lincoln MKZ parked in front of an office building.

Lincoln's U.S. sales grew 10.4% last year, and the brand is off to a very strong start in China. Image source: Ford Motor Company.

At the same time, Ford is also working to improve the profitability in the parts of its core business that haven't been quite as profitable or successful:

  • The Lincoln luxury brand, which has been surprisingly well received in China.
  • Small cars, where Ford is simplifying production to reduce costs and boost margin.
  • Select emerging markets, such as Russia and India, where investments made now are likely to pay off as the markets grow over time.

The goal is to boost the operating margin on Ford's core business to a sustainable 8% over the long term. For reference, Ford's operating margin in 2016 was 6.7%, down very slightly from 6.8% in 2015. A bump to 8% is a realistic target that Ford should be able to achieve within a few years.

That will produce some incremental bottom-line growth, while helping to fund Ford's investments in new businesses built around electrification, autonomy, and mobility. In all of these new businesses, Ford is seeking operating margin of 20% or more. 

Electrification: Enabling more compelling Ford vehicles

"Electrification" is Ford's shorthand term for its ongoing plan to move its product portfolio toward hybrid and (eventually) fully electric drivetrains. That will happen gradually, over time. For starters, Ford will tempt its customers with products that incorporate hybrid and electric drivetrains to create unique, specific advantages that -- importantly -- will convince customers to pay a bit more

A close-up of a charging plug on a 2017 Ford Fusion Energi plug-in hybrid.

Ford will launch a slew of new plug-in vehicles over the next few years. Image source: Ford Motor Company.

Imagine a hybrid pickup that could summon electric power to give a big boost to pulling or towing capacity, or a Mustang that added electric motors to a rowdy V8 to combine tremendous acceleration with a hybrid's fuel economy -- or, to take a different kind of example, a plug-in hybrid delivery van for city use that offered a meaningful reduction in a fleet operator's costs. 

Those kinds of products are coming in the near future. They'll help Ford build the scale, expertise, and customer following to move its full lineup to electrified propulsion over the next 10 to 15 years -- profitably. 

Autonomy: Self-driving Fords by 2021

Ford plans to begin mass-producing a "Level 4" self-driving vehicle by 2021. The vehicle will be a plug-in hybrid, it'll be mass-produced at Ford's factory in Flat Rock, Mich., it'll have no steering wheel -- and it won't be available to the public, at least at first.

Ford's recently acquired subsidiary, Pittsburgh-based Argo AI, has become the center of its self-driving software efforts. Argo AI, headed by veterans of self-driving projects at Waymo and Uber, may offer its self-driving system for sale to other automakers -- another potential revenue stream for the Blue Oval. 

A white Ford Fusion equipped with a prototype self-driving system is shown parked near a field.

Ford recently expanded its fleet of self-driving test vehicles. Image source: Ford Motor Company.

Ford does plan to sell self-driving vehicles to the public eventually, probably around 2025. Those will follow the first self-driving Fords, which will be used for car-sharing and ride-hailing duties. It's not clear right now whether Ford plans to run those businesses on its own or to sell cars to a company like Uber Technologies.

But Ford has already laid some groundwork that suggests it might try a ride-hailing or car-sharing business of its own.

Mobility: Transportation as a bunch of new Ford services

Ford hasn't spelled out its plans here in great detail. But it has dropped a few hints suggesting that it plans both services for individual customers and comprehensive offerings to reduce traffic in cities -- and the two are tied together.

Last year, when Ford acquired a crowd-sourced shuttle-bus service and started an urban bike-sharing program, it explained that the two were a package: Tracking the routes taken by the bikes will help Ford optimize the shuttles' routes. The idea is that the shuttles can provide something close to personalized mobility at a much lower cost than Uber or Lyft. Ford may be gearing up to offer these and other services as packages to city governments. 

A hand holding a white iPhone showing the FordPass app's menu screen.

The FordPass smartphone app is expected to serve as the starting point for customers to access Ford's upcoming mobility solutions. Image source: Ford Motor Company.

Ford has created an app called FordPass, which allows users to access Chariot and the bikes (where available) along with a few other services. So far, the services are mostly minor. But it's clear that there's much more to come, possibly including new services enabled by Ford's upcoming self-driving vehicles. 

Finally, Ford also sees a significant opportunity to draw on its many years of commercial-fleet experience to build a business around maintaining and managing fleets of self-driving vehicles. This could be a huge and highly profitable market in just a few years. 

The upshot: Ford is far more than a dividend stock

Just looking at Ford's core business, there's a lot for investors to like. Ford has a proven and stable management team, a very healthy balance sheet, competitive and popular products, and steady, strong profits that have enabled that strong dividend -- all available at something of a value price. (That dividend is likely sustainable through a recession, too.) 

It becomes even more compelling when we look a little deeper, at Ford's plan for the near future. Rather than waiting around to be "disrupted," Ford is already taking steps to build on its competitive advantages in ways that will allow it to thrive and profit handsomely as new forms of technology-enabled mobility emerge in coming years. 

Not all of those new opportunities will work out for Ford, of course. But it's a smart plan, and enough should work out to give Ford's profit and margin a significant boost over time. Meanwhile, its traditional business should continue to perform well for many years to come. (Urban mobility solutions aren't going to replace F-150s any time soon.) 

Long story short: You could do worse than to just buy Ford for the dividend. But there's a good chance that patient investors will be rewarded with a handsome profit-growth story over time, too.  

John Rosevear owns shares of Ford. The Motley Fool owns shares of and recommends Ford. The Motley Fool has a disclosure policy.