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September’s Pick

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Well, the scores have been assigned to identify our stock pick for September and the winner is… General Motors Company (NYSE: GM) or Ford Motor Company (NYSE: F). You choose. Maybe you like a tie and maybe you don’t, but here’s the scoop.

GM earned a higher score (14) than Ford (12) but they both offer strong reasons to own them. GM came out on top for its strong earnings (EPS is 7.82) but is trading at only 14% below the 52-week high. To be sure, that’s a decent discount for a solid company. Ford’s earnings are not as good (EPS is 2.25) but they are currently trading at over 21% below the 52-week high. That’s a much better sale! The dividend yield for the two companies is essentially the same at 4.78% and 4.82% so we left that factor out of our decision. The price of each company has been pretty flat for the last few months so when they begin to recover Ford has a greater potential for capital appreciation. That’s not something to ignore, especially if you get the benefit of the same dividend in the meantime.

Soooo, if you want a company that is earning more per share for you buy GM. If you want to add the potential capital appreciation of Ford to the dividend yield, choose Ford. Our strategy identifies potential stocks to purchase using an objective method of assigning scores for a variety of factors. If you’re a regular reader, you know that we don’t always just simply buy the stock with the highest score. The system identifies potential purchases from which we then make a choice. Because the dividend yields are the same, we’re going to hope for the greater eventual price increase with Ford so that’s our official pick. Honestly, whichever you choose, you can’t lose in the long run with these two.

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September 1, 2016 PDI

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October’s Pick → ← You’re Richer Than You Think

2 thoughts on “September’s Pick”

  1. Doug says:
    September 2, 2016 at 6:34 pm

    I own ford bought so I’m partial to it. Plan to keep adding to it. Last 2 buys didn’t hit the cut off date so December will be a nice dividend jump

    Reply
    1. PDI says:
      October 4, 2016 at 11:07 pm

      I think both Ford and GM will be strong performers. Hopefully Ford will begin to increase its dividend but the current 5% yield is pretty sweet in the meantime.

      Reply

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