David Whiston: GM and Ford show up on dividend investors' radar screens with dividend yields of over 4% and 6% respectively. Ford also pays a supplemental dividend once a year, which--when added to its regular quarterly dividend--comes out to an annual yield of 7.7%, using the most recent special dividend of $0.13 per share paid in March. Yields this high, especially in Ford's case, suggest the market is fearing a dividend cut, but I think both are safe because the market still does not believe that GM and Ford are different than how they or their legacy firm, Old GM, operated prior to the great recession. I do stress to clients however, that I don't expect dividend growth from either firm anytime soon, most likely not until after the next recession. Both management teams want a dividend that is sustainable throughout a cycle, so that is why both dividends have remained flat for a few years now.
