Ford Motor Co. reinstated a dividend for the first time in five years on Thursday, with a quarterly payout of five cents per share that the auto maker said it could sustain during any future downturn.
In a statement, chief financial officer Lewis Booth said the dividend, which will be payable in March, “will be sustainable through economic cycles.”
Shares of the No. 2 U.S. auto maker, which had fallen as much as 3.8 perc ent earlier in the session, pared losses after the announcement. Ford shares were down 0.4 per cent at $11.04 (U.S.) in early afternoon, on a day when the broad S&P 500 Index was down 1.3 per cent.
Initially, Ford said it would reinstate the dividend after the company achieved an investment-grade credit rating, but recently executives indicated a dividend could come sooner.
Ford last paid a quarterly dividend of five cents a share in September 2006, the same month that Alan Mulally became Ford’s chief executive.
Mr. Mulally is credited with steering the company back from the brink of bankruptcy with $23-billion in borrowing and a plan, dubbed “One Ford,” to simplify and unify product development and supplies.
Ford, the only U.S. auto maker not to take a federal bailout in 2009, is now considered the strongest of the Detroit Big Three. In October, Ford posted its 10th straight quarterly profit.
“The board believes it is important to share the benefits of our improved financial performance with our shareholders,” Ford chairman Bill Ford said in a statement.
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