There's 1 Big Reason to Own Ford or GM Stock Right Now
And that reason is different (but related) for these two auto-making giants.
Automakers operate in a capital-intensive industry with fierce competition. While Ford Motor Company (NYSE: F) and General Motors (NYSE: GM) have had their stocks beaten down over uncertainty about the potential effects of threatened and imposed tariffs both here and abroad, they are also spending billions to develop electric vehicles and are struggling in overseas markets like China.
Despite the multiple headwinds, there are still reasons to own shares of either of these Detroit-based automakers. One big reason is that both do one thing very well: Return value to shareholders through dividends or buybacks.
What's a company to do when its share prices remain heavily undervalued? The answer is simple for folks at General Motors: Buy back shares. GM's management has made a firm commitment to buying back shares, which currently trade at a paltry price-to-earnings ratio of 7 times.
