Based in Detroit, Stellantis (NYSE:STLA) is known for having produced rugged American “muscle cars” for generations. However, Stellantis also makes electric vehicles. Stellantis stock offers exposure to clean-energy vehicles and dividends.
Plus, as we’ll discover, Stellantis appears to be undervalued after a share-price crash. Stellantis offers good value, dividend reinvestment, and EV-industry participation in 2024.
Stellantis Jumps Headfirst Into the EV Price Wars
Here’s some news that should capture the attention of clean-energy vehicle enthusiasts everywhere. It seems that Stellantis-owned Jeep just opened a round of fire in the ongoing EV price wars.
No, I’m not referring to Jeep’s recently unveiled electric Wagoneer S model. This is a feature-rich and powerful EV, but its starting price is rather high at around $72,000.
Rather, I’m referring to a startling statement from Stellantis CEO Carlos Tavares. “In the same way we brought the €20,000 Citroën e-C3, you will have a $25,000 Jeep very soon,” Tavares teased at an investor conference not long ago.
Presumably, Stellantis meant that an electric $25,000 Jeep is coming to the U.S. This would be a game changer, as according to Barron’s, the “average EV in the U.S. costs about $54,000.”
Don’t expect this change to happen next month or even next year, though. Reportedly, the $25,000 electric Jeep is expected to “arrive on roads around 2027.”
Stellantis’s Value-and-Yield Combo Is Practically Unbeatable
If and when the $25,000 electrified Jeep is available in the U.S., it might just be the best deal available. And speaking of great deals, Stellantis stock is unbelievably cheap, at least according to a commonly used metric.
Sure, it was unnerving when the Stellantis share price recently crashed from nearly $30 to $22. However, now there’s a bargain that you can pounce on.
Amazingly, Stellantis has a GAAP-measured trailing 12-month price-to-earnings ratio of just 3.33x. For comparison, the sector median P/E ratio is 17.92x.
What about income-focused investors? You should definitely pay attention, as Stellantis offers a forward annual dividend yield of 7.63%. That’s much higher than the consumer cyclical sector average dividend yield of around 1%.
So, the Stellantis stock price crash had a couple of silver linings. Specifically, it allowed for a lower P/E ratio and a higher dividend yield.
Stellantis Stock: Pounce on This Deal While You Can
Stellantis and Tavares will rock the boat and shake some feathers if and when the company introduces a $25,000 electrified Jeep in the U.S. This could be a win-win for Jeep buyers and for Stellantis, though, since an affordable electric Jeep might be a bestseller.
Furthermore, Stellantis is now very reasonably valued and pays a great dividend. With all of that in mind, I’m pounding the table for Stellantis stock as it’s a great deal now that’s likely to get more expensive later on.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
