There is less than a month left in 2025, which has been quite an interesting year from a macro perspective. Artificial intelligence continues to grab investors' attention. However, changes to trade policies have also been a focal point, as has the Federal Reserve's plan to cut interest rates.
Despite these factors, Ford Motor Company (F +0.84%) has had a fantastic year. The auto stock's price is up 31% in 2025 (as of Dec. 5), markedly outperforming the S&P 500. Maybe you're taking this performance as an indication that it's time to look closer at the business. Should you buy Ford shares right now?
Image source: Getty Images.
Can Ford satisfy growth investors?
It's a good idea for investors, particularly those who are seeking returns that can outperform the broader market over the long term, to identify companies that possess meaningful growth potential. Higher revenue shows that a business is experiencing better demand and that its products and services are bringing in more customers over time. What's more, it might mean that prices are going up. These are wonderful traits for a company to have.
Ford doesn't exactly impress in this regard, unfortunately. In Q3 2025 (ended Sept. 30), the Detroit carmaker brought in $47.2 billion in automotive revenue. Exactly 10 years before in the third quarter of 2015, the total was $35.8 billion. This means that in a decade, car sales increased at a compound annual rate of 2.8%. This isn't exciting at all.
Measured by the number of passenger vehicles sold on an annual basis, the automotive industry isn't expanding rapidly. On a seasonal annual adjusted basis, 16 million cars were sold in the U.S. in November, slightly less than the same month 20 years before. That backdrop isn't exactly ideal. Wall Street analysts forecast Ford's revenue to rise by just 2.3% between 2024 and 2027.
That outlook makes it difficult for investors to be very optimistic. The analyst community is fully aware of Ford's pro segment that grew revenue double digits and that posted an 11.4% operating margin in Q3. And they know about the company's updated electric vehicle strategy, which aims to build affordable and cost-efficient models. Nonetheless, Ford's top line isn't suddenly going to receive a jump-start and trend up at a faster clip.
NYSE: F
Key Data Points
Valuation and dividends might not be enough
Ford won't satisfy growth investors. However, it might draw the attention of value investors. The stock has performed exceptionally well in 2025, but it trades at a price-to-earnings (P/E) ratio of 11.2. The company pays a quarterly dividend of $0.15. At the stock's current price, this makes for a sizable dividend yield of 4.6%.
Investors looking to take advantage of the cheap P/E multiple are probably hoping for valuation expansion. That's far from a certainty. Does Ford deserve to trade at a P/E multiple of 25, for example, that will put it in the same ballpark as the S&P 500? The bulls might think the stock is deserving of that valuation. But Ford doesn't have the characteristics that would make an investor believe that it's a high-quality business.
Its return on invested capital is very low, at a reported 7.3%. Consequently, there might not be an economic moat here. And the company's profitability isn't impressive. Plus, demand can be cyclical.
The most compelling argument working in Ford's favor is its long history, as it's been around for over a century. That staying power might turn heads, although it hasn't benefited shareholders. In the past decade, the stock has produced a total return of 60%. That translates to a wildly disappointing annualized return of 4.8%.
To be fair, Ford can have short time spans when the stock does well, as has been the case in 2025. But I believe that this trend of underperformance will be a mainstay over the long run, say the next 10 years and beyond. That's why I'm not buying the stock.
