In the past decade, shares of Ford Motor Company (F 2.49%) have underperformed the S&P 500 index, putting up a total return of 101% versus the market's 328% (as of Feb. 17). But last year, the car company broke out, as the share price skyrocketed 33% in 2025.
The momentum is eye-popping. But can it help this auto stock turn a $10,000 starting investment into $1 million one day? Here's how investors should view this situation.
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Investors need huge growth potential
If investors are seeking a monster 100-fold gain from an opportunity, then it shouldn't come as a surprise that the business in question must have massive growth potential. Whether it comes from new or existing products, there must be a long runway for expansion in the decades ahead.
Does Ford fall into this bucket? Consider that in the past decade, the company's automotive revenue went from $141 billion in 2015 to $174 billion last year, translating to a compound annual growth rate of just 2.1%. This trend isn't supporting the bull case for the stock.
Over the next three years, Ford's car sales are expected to increase at a yearly pace of 2.5%. That's according to the consensus view among sell-side analysts.
This is the nature of the automotive industry, a very mature market. Even electric vehicles (EV) have seen demand soften. That's why Ford drastically cut back EV plans as part of a significant restructuring, taking a massive $19.5 billion special charge in Q4 to refocus its strategy. That huge cost isn't providing encouragement to investors, who should expect better capital allocation from a management team.
NYSE: F
Key Data Points
If revenue isn't growing at a strong rate, then it doesn't support profits rising in any meaningful way, either. In the long run, a stock's performance will be tied to its bottom-line performance.
Ford's operating margin averaged a disappointing 1.9% over the last 10 years. Investors have no reason to believe that profitability will improve over time. This hasn't been the case historically. This isn't a scalable business model.
Calling all dividend investors
At the current price, Ford's dividend yield of 4.3% looks hefty. On a $10,000 investment, this translates to $430 in yearly income. This might compel certain investors to take a closer look at the stock, even though the dividend isn't the safest, given the cyclical nature of the auto industry and the impact it can have on Ford's financial picture.
But Ford isn't going to turn its shareholders into millionaires.
