Today, I’m going to talk about what I expect to be one of the top-performing stocks in 2022.

In a recent YouTube video, I mentioned that I expect electric truck manufacturer Rivian (Nasdaq: RIVN) to be a home run.

Staying on that theme, Ford’s (F) electric F-150 is going to go gangbusters. Earlier this year, the company said it is doubling production to meet expected demand. That sent the stock shooting higher. The F-150 is America’s bestselling vehicle to begin with. Now imagine that the truck goes from zero to 60 in just 4.4 seconds.

Now, I have never been a Ford fan. I’m old enough to remember the Ford Pinto scandal when Ford decided it was cheaper to pay off families of drivers who were killed by the Pinto’s exploding gas tanks than to recall the cars.

Ford had several other safety scandals over the years, including faulty ignition switches and problems with its tires.

As a result, I never trusted Ford either with my family inside one of their vehicles or with my investment dollars.

But those issues were a few decades ago, and as Rocky Balboa pointed out, people change.

So do management teams. And I won’t hold today’s management accountable for the mistakes of those that came before it.

I now think Ford is one of the best places to put your money in 2022.

This year, Ford’s earnings are expected to grow 5% to $1.99 per share, but earnings are forecast to grow 15% in each of the following two years.

The stock surged earlier this year on the F-150 production news. Even at the new higher price, it’s trading at only about eight times forward earnings. That compares with the S&P 500’s 21 times forward earnings. So the stock is cheap.

When the pandemic struck in 2020, Ford eliminated its dividend. It had been paying shareholders $0.15 per share quarterly. In the fourth quarter of 2021, Ford reinstated the dividend at $0.10 per share. That comes out to a yield of 1.6% today. That’s okay, but nothing great.

I expect that to change.

In 2019, before the pandemic, Ford generated about $10 billion in free cash flow and paid shareholders $2.4 billion in dividends. This year, earnings are forecast to be the highest they’ve been in five years and are expected to increase again in 2023. Free cash flow should follow, providing ample cash for Ford to raise its dividend in the future.

I would not be surprised if, by 2023, shareholders are earning a 4% yield on today’s prices. And importantly, I expect Ford’s stock to shoot higher.

America loves trucks, particularly the F-150. America also loves to go fast.

A pickup truck that goes fast – oh, and can also restore power to your house during a blackout – is going to be wildly popular. Don’t be surprised if Ford needs to increase production yet again. I like Rivian and think it will do very well. But Ford’s electric F-150 is cheaper and has better brand recognition. It’s going to be a game changer on the road and could be for your portfolio as well.

— Marc Lichtenfeld

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Source: Investors Alley