Dividend stocks are a great way for investors to build long-term wealth thanks to reinvested dividends and the power of compounding. They offer stability as the businesses are typically more mature and stable, and dividend stocks have historically outperformed non-dividend paying stocks.
If you're screening for high-yielding dividends, both of the next stocks probably appear on the list -- but one is clearly a better option for income investors.
A higher margin story
Ford Motor Company (F +12.16%), a global automotive company developing and delivering trucks, SUVs, commercial vans, cars, and luxury vehicles, is separated into three business segments: Ford Blue, its iconic gas-powered and hybrid lineup; Model-e, its electric vehicle (EV) lineup; and Ford Pro, its commercial business.
Image source: Ford Motor Company.
Ford Blue continues to chug along while Model-e is suffering billions in losses as the company builds scale and volume with electric vehicles, but the growth story is found with Ford Pro. Let's compare the business segments real fast: Ford Blue generated $5.3 billion EBIT (earnings before interest and taxes) in 2024 at a 5.2% EBIT margin, while Model e lost $5.1 billion. Ford Pro checked in with $9 billion EBIT at an impressive 13.5% EBIT margin.
Not only did Ford Pro generate significantly more earnings, it did so at more than double the EBIT margins. Further driving Ford Pro's margins are its software and physical services, which contributed 17% of Ford Pro's EBIT on a trailing-12-month basis ending in the second quarter of 2025. Ford Pro paid subscriptions also surged 24% during the second quarter compared to the prior year, to 757,000.
Ford's investment thesis is pretty straightforward: Let Ford Blue chug along as it has historically while riding Ford Pro's higher margin business, and build scale and lower costs to turn Model-e's billions in losses to billions in profits. While Ford does that it will pay you a generous 5% dividend yield and will typically dish out a supplemental dividend annually with excess cash flow.
NYSE: F
Key Data Points
Problems continue to mount
EV maker Stellantis (STLA +1.11%) has a major turnaround effort on its hands, but at least it has a newly appointed CEO as of June 2025, Antonia Filosa, to try to lead the charge. Here's a few of the developments he'll have his hands full with in the near term, and why Stellantis' over 7% dividend yield is fool's gold.
For the first issue facing Stellantis, let's rewind to April when the company suspended its guidance due to a massive profit drop in 2024 and uncertainty with the Trump administration's tariffs. The good news is that Stellantis at least has a plan to help offset tariffs and that's to invest a hefty $13 billion on expanding production in the U.S. by 50% and launch five new vehicles for the market. That's important because it will reduce imports -- Stellantis imported roughly 600,000 of the 1.3 million vehicles it sold to Americans last year.
The rest of Stellantis' issues might not be so easy to solve in the near term. The newly appointed CEO faces some tough decisions when it comes to the company's 14 brands -- it may be time to discontinue some and refocus investment in others. Filosa will also have to mend relationships with not only suppliers but with its own dealership network.
NYSE: STLA
Key Data Points
Making the company's profitability crunch worse is that analysts, according to Barron's, estimate Stellantis' factory capacity utilization in Europe and North America to be between 50% and 60% -- a low level for the automotive industry. Filosa has his hands full with a near complete turnaround needed at Stellantis.
What it all means
While both of these dividends will likely pop up on any screener looking for high-dividend yields, not all dividends are created equal. Ford has a clear path forward with profitability and cash flow as well as a thriving higher margin business in Ford Pro. Meanwhile, Stellantis is having profitability concerns and newly appointed CEO Filosa has many problems to fix. Ford is the dividend you want here, and it's hardly even comparable.
