I never thought of myself as a Jeep guy.
For years, I didn’t understand the freedom that comes with zipping plastic windows off of your car. Can’t you just roll the windows down? What if it starts raining? Can’t thieves just break into it with a thumb and a forefinger?
And how many places can you really “off-road,” and how often would you possibly want to drive into the middle of nowhere to wind through hills and creeks and end up with a mud-caked mess?
Most of all, I’d been bothered by silly bumper stickers like this:
There are many others like it: “Fun Begins Where the Road Ends,” “You Can Go Fast, But I Can Go Anywhere,” and “I May Get Lost, But I’ll Never Get Stuck.”
All of them sounded hokey, and I silently judged the entire community.
I was also mighty confused with the “Jeep Wave” that I’d seen tossed about on my regular car commutes. Certainly, you’ve seen these Jeepers toss their hand out the window to one another with a peace sign plus a thumb gesture. I don’t know if anybody driving a Honda Civic can attest to a similar, not-so-secret handshake.
But one day, everything changed. I was driving a Nissan Cube at the time – one in a series of bizarre automobile decisions I’d made over the years (I’d also owned two Ford Probes, so I’m probably the last dude to be judging other people’s taste in vehicles). I had taken my son to a birthday party, and while we were mini-golfing indoors, a violent snowstorm hit. We exited the party to treacherous roads, especially for a mailbox on wheels.
I could barely keep the Cube on the road, and we dangerously slid our way back home.
That day I promised to get a safer, more stable vehicle. To my surprise, that turned out to be a Jeep Wrangler.
Since I have two children and often have to chauffeur at least four kids, I had test-driven several other SUVs. I was underwhelmed with my choices, the costs, and the very real lack of cool factor. And I damn sure wasn’t going to buy a minivan.
Eventually, I shed my preconceptions of Jeeple and actually drove one. It was great! I felt safe. I felt comfortable. And, you know what, I felt cool! At no point did I worry about the capabilities of my car: rain, sleet, snow, mud – my four-wheel drive Wrangler and I were good to go.
I bought my Jeep that day and have never looked back. Now I crave those warm, sunny days when I can “go topless.” I beckon my fellow Jeep freaks to wave that silly little wave (and get upset when the noobies don’t reciprocate). There have been no less than three occasions that I’ve pulled others out of ditches or mud with ease.
Not only do I give the Jeep Life a resounding endorsement, but the company’s stock is just as exciting as an off-road excursion.
Stellantis (NYSE: STLA)
Most people don’t know who owns the Jeep brand. That’s because Jeep is owned as part of a mega-merger of Fiat Chrysler Automobiles (FCA) and French company Peugeot S.A. (PSA). That partnership created Stellantis (NYSE: STLA), the third-largest automotive manufacturing company behind Toyota and Volkswagen.
Aside from Jeep, Stellantis also produces brands like Alfa Romeo, Chrysler, Dodge, Fiat, Maserati, Opel, Peugeot, and Ram.
And the company is firing on all cylinders.
They recently shared their financials from the last quarter. Stellantis reported a 26% rise in net profit to 16.8 billion euros ($17.9 billion) and a 41% annual jump in global battery and electric vehicle sales.
That electric vehicle segment is especially impressive. Stellantis has 23 battery and electric vehicles (BEVs) and sold 288,000 globally in 2022. According to CEO Carlos Tavares, that is expected to double to 47 models next year and 75 in 2030, with a goal of reaching 5 million in sales annually.
“We now have the technology, the products, the raw materials, and the full battery ecosystem to lead that same transformative journey in North America, starting with our first fully electric Ram vehicles from 2023 and Jeep from 2024,” Tavares said.
This is part of Stellantis’s ambitious plan to achieve carbon net zero by 2038, with an intermediate target of cutting carbon emissions in half by 2030.
The company just launched the Jeep Avenger, the first-ever fully electric Jeep, which promptly won European Car of the Year for 2023.
The Big Four
You may be asking why you haven’t heard much about Stellantis’ success lately. Tesla (NASDAQ: TSLA), Ford (NYSE: F), and General Motors (NYSE: GM) make headlines almost every day. But to this point, being the product of a merger that flew under the radar, most retail investors haven’t even heard of the stock. Sure, they’ve heard of Chrysler, but Stellantis hasn’t broken through the EV noise that has been the talk de jour of the investment world.
But some shrewd investors have certainly taken notice, as evidenced by Stellatis’ stellar performance over the past year:
Stellantis has quietly become the most profitable car maker of the bunch. It trades at four times expected earnings, while GM trades at seven times, and Ford trades at eight. That’s double, and I’m shocked that this hasn’t been a bigger story in the investment world.
Oh, and did I mention that Stellantis pays out an unbelievable dividend? After crushing earnings, it announced a 4.2 billion euro ($4.48 billion) dividend payout to shareholders and approved a share buyback of 1.5 billion euros ($1.6 million) to be executed by the end of the year.
It currently yields 7.8%!
To put that in perspective, Tesla yields nothing, GM yields under one percent, and Ford yields 4.8% (though that dividend may be in jeopardy).
If I were investing in the future of automobiles right now, there isn’t a company I’d rather ride with than Stellantis.
Ride This Trend
Stellantis’ name comes from the Latin verb stello, meaning “that brightens with stars.”
The stars have clearly aligned for the company, and the future is bright.
Ram already sold out their booking of the 1500 REV pickup truck just five days after the order books opened. As mentioned earlier, the Jeep Avenger won European Truck of the Year and also won the Super Bowl commercial battle with its “Electric Boogie” ad.
They began taking orders for the Jeep Avenger in December. A month later, the company announced that it had already received more than 100,000 orders for the new Jeep EV.
Three new Jeep EV models are set to roll out by 2025.
Stellantis has also proactively sourced the materials needed to outfit their new stable of BEVs. They announced a $155 million investment in a copper project in Argentina, which will make a major contribution to their plan to become carbon net zero by 2038. The company is acquiring a 14.2% equity stake in McEwen Copper, a subsidiary of Canadian mining company McEwen Mining, which owns the Los Azules project in Argentina, and the Elder Creek project in Nevada, USA.
Stellantis will become McEwen Copper’s second-largest shareholder. Los Azules plans to produce 100,000 tons per year of cathode copper at 99.9% purity starting in 2027, and the resources can secure the operation for at least 33 years.
Global demand for copper is expected to double in the coming years, and access to the crucial metal will be critical for companies like Stellantis.
“Stellantis and McEwen are ideal partners for a large project like Los Azules. Together, we share a collective vision to build a mine for the future based on regenerative principles and innovative technologies that can achieve net-zero carbon emissions by 2038!” said McEwen Copper Chief Executive Rob McEwen.
“We are committed to delivering green copper to Argentina and the world, a product that will contribute to the electrification of transportation and the protection of our atmosphere.”
Things are firing on all cylinders for Stellantis. They may be the sleeper EV pick of this year and beyond.
Godspeed,
Jimmy Mengel
The Profit Sector
Follow me on Twitter @mengeled
