Ford Motor Company (F -0.38%) is having a bumpy 2023. The automaker's stock is down more than 20% over the past year due to challenges from both inside and outside the company.

Temporary problems can create long-term investment opportunities, so it's worth digging deeper to see whether Ford's current issues should keep you away from owning the stock.

As it heads into a new year, the company faces three primary problems.

1. Internal and external margin problems

The automotive industry is notoriously competitive, yet companies must spend billions of dollars to build and operate their huge factories. Ford, which built its business on internal combustion engine vehicles, must now balance its investments into building and growing an electric vehicle segment to remain competitive.

Ford has battled internally to keep its costs down. It's no secret that inflation spiked in late 2021 and 2022, which jacked up the costs of components and materials. Ford also recently came to an agreement with its unionized factory workers. The new contract will, between now and 2028, raise its employee starting wage by around 68% to more than $28 an hour, boost its top autoworker wage by 30% to above $40 an hour, and improve employee benefits, including the restoration of some that the company cut during the Great Recession. Ford expects those new labor expenses will add between $800 to $900 in costs to each vehicle it produces.

Passing increased costs to customers has helped it grow its revenues and profits. The company's unit sales were flat year over year in Q3, but its revenue was up 11%. Can that last? Through the first nine months of 2023, unit sales were up 6% year over year, so Q3 unit sales being flat is a reflection of sales slowing.

2. Scaling back EV investments

Ford's EV business might grow slower than management previously predicted. Unit volume did grow 44% year over year in Q3, driven by rising production of the Mustang Mach-e. But it appears demand growth is softening. The company announced it was deferring $12 billion worth of investments to slow down its expansion.

Management emphasized balancing growth with profitability, but it is a potential lose-lose situation. Ford's EV segment's losses grew along with volume. Its $1.3 billion in EV losses in Q3 nearly offset its $1.7 billion profit from Ford Blue, its non-commercial gas-powered vehicle segment.

Ford must grow its unit sales enough to build electric models profitably, and slowing down its production expansion rate could make that more difficult.

3. Is Ford all-in on the future?

Management faces a difficult road ahead as it grows its EV business in a hyper-competitive industry. It's not doing itself any favors by insisting on maintaining its dividend. The problem with a dividend is that it's cash leaving the company -- cash that can't be used to help the business generate more returns.

The dividend has become a burden. While Ford's free cash flow covers its current payouts of about $5 billion annually, it does so with almost nothing left over. Now, free cash flow is calculated after capital expenditures like new factories are taken out, so Ford can afford its dividend.

F Free Cash Flow Chart

F Free Cash Flow data by YCharts.

That said, wouldn't a more deep-pocketed Ford be able to invest for growth more aggressively? EV rival Tesla doesn't pay dividends because it wants to retain all its profits to reinvest them. Ford opting to pay a dividend means it must squeeze more value out of fewer investible dollars to compete.

Should you invest in Ford in 2024?

Add all three of these observations together, and Ford comes across as a company that wants to do several things simultaneously. It wants to grow its EV business, but only so fast, while dedicating a large portion of company capital to pay billions of dollars of dividends annually.

It's unclear whether that's a winning strategy. Even as the stock trades at a forward price-to-earnings ratio of just under 6, analysts expect zero earnings growth over the long term, which makes it hard to get excited about the low valuation. The stock could be cheap for valid reasons.

F EPS LT Growth Estimates Chart

F EPS LT Growth Estimates data by YCharts.

It feels like a lot of work to justify buying the stock at this point, so it's safe to say that investors would be better off waiting for Ford to show some tangible results before buying shares.