Ford Motor Company (F -1.51%) just reported financial results for the three-month period that ended Dec. 31. Revenue rose 5% to $48.2 billion, with adjusted diluted earnings per share increasing 34%. These headline figures came in ahead of Wall Street analyst estimates, which is an encouraging sign.

Nonetheless, the auto stock dropped following the announcement. Shares were trading well below $10 on the morning of Feb. 10. Does this mean you should buy Ford?

Latest financial results

The market is forward-looking. Therefore, investors probably weren’t happy with Ford’s guidance for 2025. The business expects to generate $7 billion to $8.5 billion of adjusted operating income this year, which would represent a decline from $10.2 billion in 2024. What’s more, the leadership team believes industry pricing will come down 2% this year, creating a headwind.

As has typically been the case, Ford’s electric vehicle division, called Model e, continues to drag down the company’s financial results. This segment posted a $1.4 billion operating loss in Q4, bringing 2024’s total to $5.1 billion. This was despite unit volume rising 10% on a year-over-year basis in the last three months of 2024.

Ford’s pro segment remains the business’s bright spot. Revenue was up 6% in the fourth quarter. And profitability is strong, with an operating margin of 10%.

Focus on the big picture

Investors can certainly find insights when a business reports quarterly results. But if you aim to own companies for the long term, it’s best to zoom out and focus on the bigger picture. By doing this, you’ll easily find many unfavorable qualities with Ford.

If it’s growth you’re looking for, then this company should not be on your radar. Consider that in the past decade, revenue has increased by just a 2.5% compound annual rate. The global passenger vehicle industry is extremely mature, with unit volumes rising slowly on an annual basis. This doesn’t provide a robust backdrop for Ford to meaningfully grow sales.

The best businesses are the ones that can grow without requiring a lot of capital investment. Companies that require capital but that actually have growth prospects can also be attractive.

Unfortunately, Ford falls on the exact opposite of this spectrum. Not only does it need tons of capital to be directed toward expanding manufacturing capabilities, but it also has high expenses for its labor force and input materials. This leads to persistently low profit margins and returns on invested capital. In my opinion, this points to the lack of an economic moat.

Demand can also be cyclical. Cars are usually the second-largest purchase a person makes in their life. When economic hardship hits, this purchase can be delayed. This means Ford is very sensitive to macro factors that are outside of its control.

The potential harm that can be done with the implementation of tariffs is another obvious example of how much Ford is exposed to outside forces. There’s heightened uncertainty as to how things will play out.

“There is no question that tariffs at 25% level from Canada and Mexico, if they’re protracted, would have a huge impact on our industry with billions of dollars of industry profits wiped out and adverse effect on the U.S.,” CEO Jim Farley said on the Q4 2024 earnings call.

Do you want dividends?

Based on what I just described, I don’t believe Ford is a smart investment to make for long-term investors whose goal is to outperform the broader market. In the past 10 years, the stock has produced a negative total return of 3%. On the other hand, the S&P 500 generated a total return of 254%.

If you primarily invest for dividends, then it’s a different story. Ford’s current dividend yield of 6.46% might be enough of a reason for some investors to buy shares.