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It’s a Jeep Thing: Investing in Stellantis (NYSE: STLA)

The Sleeper EV Pick of 2023

Jimmy Mengel by Jimmy Mengel
March 10, 2023
in Dividends and Income, Stock Market News
0
It’s a Jeep Thing: Investing in Stellantis (NYSE: STLA)
  1. Stellantis (NYSE: STLA)
  2. The Big Four
  3. Ride This Trend

I never thought of myself as a Jeep guy. 

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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:

Jeep bumper sticker, if you can read this flip me over

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.

Fully electric Jeep Avenger, European Car of the Year for 2023
Courtesy of Wikimedia Commons. 

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:

one year chart of stock performance of Stellantis (NYSE: STLA), Tesla (NASDAQ: TSLA), Ford (NYSE: F), and General Motors (NYSE: GM)

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,

sig-jimmy

Jimmy Mengel
The Profit Sector

Follow me on Twitter @mengeled

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Tags: DividendsFiatFord (NYSE: F)General Motors (NYSE: GM)JeepJeep AvengerJeep EVStellantis (NYSE: STLA)Tesla (NASDAQ: TSLA)
Jimmy Mengel

Jimmy Mengel

I’ve had a long road as an investor, researcher, and writer of all things investing.  I began investing when I was 8 years old: I started with a small collection of baseball cards and quickly learned the art of buying low and selling high.  By the time I was 12, through forward-thinking investment in rookie cards for players that turned into superstars and countless trades with my buddies, I had amassed a treasure of cards that were worth thousands of dollars then – and tens of thousands today. I learned several things about investing through my card collection: buy value, avoid hype and know your timeline.  My dad, a financial analyst then, even invited me to present my strategies to his office colleagues. It was then that I began turning those lessons into my own stock market portfolio.  The companies I bought back then, like Disney, General Electric, and Coca-Cola, allowed me to build up enough wealth to buy my first car. I discovered the power of dividends, the magic of compound interest, and the sanctity of safety. The lessons I learned then still stick with me today. I wanted to continue sharing my story with others, so I began working my way into financial journalism, which I’ve done for over a decade. I’ve had the privilege of helping hundreds of thousands of readers achieve financial independence. I've brought my readers closed annual portfolios of 79%, 70%, 76%, and a historic 382% over the last four years alone. Several of the stocks I uncovered ended up becoming life-changing quadruple-digit gains. In the process, I’ve traveled the globe from Africa to Colombia to Transylvania, meeting with CEOs, CFOs, and CTOs in different market sectors. I’ve also toured with presidential candidates, grilled influential congressmen, and interviewed pop-culture business icons. I’ve been a keynote speaker at some of the largest investment conferences in the U.S. I go the distance and put my boots on the ground so you’ll have all the tools you need to succeed in any market. I couldn’t be more excited to bring the same research, enthusiasm, and results to The Profit Sector, where I’ll break down the market for you weekly. Read my bio and access my full free archive here. 

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Protected by copyright laws of the United States and international treaties. This website may only be used pursuant to the Terms and Conditions and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of The Profit Sector, LLC. 415 1st Ave N #19868, Seattle, WA 98109

© 2022 The Profit Sector, LLC. All rights reserved. Our website provides stock market research, commentary, and analysis. Information is provided “as is” and solely for information purposes, not for trading purposes or advice.

Nothing on this website should be considered personalized financial advice. Any investments recommended herein should be made only after consulting with your personal investment advisor and only after performing your own research and due diligence, including reviewing the prospectus or financial statements of the issuer of any security. The Profit Sector, its managers, its employees, affiliates and assigns (collectively "The Company") do not make any guarantee or warranty about the advice provided on this website or what is otherwise advertised above. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. The Company is not affiliated with, nor does it receive compensation from, any specific security. To the maximum extent permitted by law, the Company disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations provided herein prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

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