As Ford sits in a bear market, trader says there’s only one reason to own the stock

Trade war fears came for Ford and won. The automaker skidded into a bear market this month following escalating trade conflicts and disappointing earnings.

After its decline, the last thing it should do is tinker with its dividend, says David Seaburg, head of sales and trading at Cowen & Co. At 6 percent, it's one of the highest dividends in the market.

"The 6 percent dividend yields are the only reason to own this story right now," Seaburg told CNBC's "Trading Nation" on Thursday. "I don't think they're going to cut the dividend. I think it'd be a death blow to the company to do so. I think the company probably gives some reassurance on that, and when they do I think you probably get a lift in the stock."

Ford tumbled earlier this week after missing second-quarter earnings estimates and guiding for full-year profit below expectations. CFO Robert Shanks said in a post-earnings call that the company's redesign could be funded without "impinging on our other capital outlays," including its regular dividend.

One positive for Ford is that recent sell-offs have made for an attractive valuation, adds Seaburg. It trades at 7 times forward earnings, more than half the S&P 500's multiple.

Mark Tepper, president and CEO of Strategic Wealth Partners, says Ford's troubles are reason not to buy even if it's considered cheap.

"I don't think the timing is right for anyone to hop in and consider this a long-term play today," Tepper told "Trading Nation" on Tuesday.

It's facing headwinds on multiple fronts, Tepper continues, including auto tariffs implemented by President Donald Trump, losses in European and Asian markets, and a recent supplier fire in May that cost it $600 million.

"They keep dropping the ball here, and I'm really not confident in their business strategy," said Tepper. "I think the dividend is safe. However, I wouldn't hop into this thing just for the dividend. I'd be staying away from this one at least until we get some clear direction on what their business strategy's really going to be."

Ford shares are down 20 percent this year. It is 25 percent lower than its 52-week high set in mid-January, pushing it over the 20 percent threshold that indicates a bear market.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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