Ford Motor Co. (F) has been on the resurgence in the past year or so. It’s chief domestic rival General Motors has yet to make a return to Wall Street, Japan auto maker Toyota (TM) has been beset by recalls and Honda (HMC) has struggled for the past six months as the auto industry looks to the future.

Ford continues to shine as one of the best auto stocks to buy right now. The company turned profitable in the third quarter of 2009, and has seen steadily improving earnings per share for more than a year. Each of these Ford earnings reports blew away Wall Street estimates, with Ford Motor Co. stock posting at least a 48% earnings surprise in each of the last four quarters.

All these improvements for Ford have translated into big profits for F stock as well. Ford is up 15% year-to-date in 2010, compared with a less than 1% gain in the Dow Jones Industrial Average. In the last six months, F stock is up 30% and in the last year Ford is up over 110%.

With all these gains, you’d think investors would have little to complain about. But there is one problem: Ford has not paid a dividend since 2006. Now that the company has become profitable, some are calling for F stock to start making quarterly payouts once more.

The lack of a dividend increase for Ford rubs some investors the wrong way. But what’s really raising hackles on Wall Street is the fact that Ford Motor Co. is in talks with the United Auto Workers to restore college tuition reimbursement for its 41,000 hourly U.S. workers. Considering the cost of education these days, that’s a huge payday for a group of employees many already see as grossly overcompensated.

It’s difficult to pin down how many workers would take Ford up on the offer, but if mere 1,000 members of the workforce enroll, that’s over $7 million based on the 2009-10 average cost of $7,020 for a public four-year college. Previous tuition benefits had included money to cover books and other costs, so real numbers could be even higher if the plan is agreed upon.

With almost 3.5 billion shares outstanding, that money isn’t much of a payday for F stock shareholders. But it’s the principal of the thing for many income-oriented Ford stock investors who stuck with the stock through some dark days in 2008 and early 2009.

Ford CEO Alan Mulally said at the company’s recent shareholder meeting that F stock has no timetable for its dividend as of yet, though he tossed out a vapid comment about how he expects the company “to be solidly profitable for the full year in 2010 on a pretax basis, excluding special items.” He also pointed to “continued improvement” in 2011, but also no guarantee of a dividend.

As of this writing, Jeff Reeves did not own positions in any of the stocks named here.

Tell us what you think here.

Related Articles: