TSLA - Stellantis And Tesla: Combine These Stocks For The Ultimate Automotive Portfolio

2024-04-26 06:58:06 ET

Summary

• Tesla and Stellantis are two automakers that complement each other, together forming what could be considered an "artificial" leading automaker.
• Tesla is the leading EV automaker, while Stellantis has a strong global reach and a portfolio of well-established car brands. I see both stocks as currently undervalued.
• The two companies boast strong financials, featuring solid balance sheets and operating margins higher than 10%. Additionally, they have a widespread global presence.
• By entering a 50/50 position in these two stocks, you can capitalize on Tesla's innovation and aggressive market strategies along with Stellantis' attractive dividend and traditional business approach.

Stellantis N.V. ( STLA ) and Tesla, Inc. ( TSLA ) are two very distinct automakers that, in my view, perfectly complement each other. By entering a 50/50 balanced position in the two companies, you can create an “artificial” automaker in your portfolio that is bound to dominate the industry and provide superior returns for shareholders.

Tesla is the leading electric vehicle ((EV)) automaker in the world. Stellantis is the fruit of the merger between Fiat Chrysler Automobiles and the French manufacturer PSA Group. Together, they have an unparalleled global reach in the largest car markets and a world-leading set of car brands, including Jeep, Maserati and, of course, Tesla.

From a financial perspective, the two companies respectively enjoy very strong balance sheets, with among the lowest debt in the industry. Both companies also have operating margins higher than 10%, which means they both are in the top 7 automakers by operating margin....

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