Ford has announced that it is to reinstate its quarterly share dividend. It will be the first quarterly share dividend for its shareholders since 2006.

The company’s board of directors have approved a quarterly dividend of 5 cents per share payable on March 1 2012. The move had been anticipated by analysts.
 
“We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow,” said Bill Ford, executive chairman, Ford Motor Company.

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“The board believes it is important to share the benefits of our improved financial performance with our shareholders. We are pleased to reinstate a quarterly dividend, as it is an important sign of our progress in building a profitably growing company and our confidence in the future.”
 
Lewis Booth, Ford executive vice president and chief financial officer, said the company’s strong liquidity and balance sheet improvements provide the underlying financial strength to resume paying a quarterly dividend.
 
“Building a strong balance sheet that supports our growth plans remains a core part of our One Ford strategy,” said Booth. “We have demonstrated our capability to finance our plans and we are confident that we can begin to pay a dividend that will be sustainable through economic cycles.”

Ford suspended its quarterly dividend in 2006 after its credit rating fell into junk status. Company officials have said they intended to resume a dividend after regaining an investment-grade rating.

Credit rating agencies upgraded Ford in October when it signed a four-year labour agreement with the UAW. While it has still not quite made investment-grade, analysts see it as close enough to justify restoring the dividend.

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