Stellantis' (STLA -0.15%) earnings report are impressive, one that belies its reputation.  Consider this: It's inexpensive, pays a strong dividend, and has good prospects going forward. Investors underestimate company CEO Carlos Tavares, who's delivering strong results.

Need proof? Check out its latest earnings report; it's impressive.

In 2022, Stellantis generated an operating profit of $24.4 billion; that's up significantly from 2021, when the company generated $19 billion. Profit margins increased slightly more than one percentage point to 13.2%. 

The company topped Tesla's 2022 operating profit of $13.6 billion, as well as General Motors' $14.3 billion and Ford's $10.4 billion. Margins also topped GM's 11.3% and Ford's 6.6%. Only Tesla reported higher margins in 2022 at 16.7%.

Understandably, the company isn't getting the recognition it deserves, as the components it's made of weren't exactly killer investments. Both Fiat Chrysler Automobiles and PSA Group survived only through the generosity of government bailouts in the United States and France, respectively. But the newly combined company is in far better shape under CEO Carlos Tavares, with all worldwide regions reporting increasing income. But Stellantis' constituent companies had reputations that hang over the newly formed company like a dark cloud. As a result, Stellantis trades for 2.6 times earnings, as opposed to 6.3 for General Motors, 5.2 for Ford, 10 for Toyota, and 54 for Tesla.

The road ahead

The company also unveiled a share buyback of as much as 1.5 billion euros ($1.6 billion) and will pay a dividend of 1.34 euros ($1.41) a share, up from 1.04 euros ($1.10) in 2021. 

Stellantis was formed two years ago through the merger of Fiat Chrysler Automobiles and France's PSA Group. The company's broad product reach is reflected in its many brands, which include Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, and Vauxhall. While some brands, such as Jeep, have global reach, most are strong regional players, including regions such as Europe and South America.

Stellantis reported that it exceeded the 5 billion euro ($5.3 billion) cost synergies target it set at the time of the merger by a significant amount last year, achieving cash synergies of 7.1 billion euros ($7.5 billion). But semiconductor shortages and logistics constraints led vehicle deliveries to decline 2% last year.

Nevertheless, the company is addressing some of the issues that concern investors, particularly its slow conversion to electric vehicle production.

Like Toyota, Stellantis is moving into electrification with both hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs). The company has started production of the Jeep Avenger for the European market, Jeep's first BEV. While most of the company's electric vehicles are HEVs, sales were up 41%  last year, rising to 288,000 vehicles, including the Jeep Wrangler, Jeep Grand Cherokee, Ram 1500, and Chrysler Pacifica hybrids. That's enough to get it named as one of the top auto stocks of 2023.

It also reaffirms the fact that this makes for a good long-term buy.

In fact, its Jeep Wrangler 4xe is America's best-selling plug-in hybrid. And ordering has opened for Stellantis' first EV for the U.S. market, the Ram 1500 REV, and more models will follow for the 2024 model year.

Given that only 10% of global new car sales are electric vehicles, there's still plenty of time for Stellantis to get into the game.

And the automaker is developing an exclusive EV platform for its future EVs, as well as forming battery manufacturing joint ventures, much like its peers. Stellantis is looking for sales to grow globally next year, and anticipates generating a positive free cash flow and an operational profit margin in the double digits.

While none of this means Stellantis' stock price will rise, it does mean you get a lot of bang for the buck, making it well worth buying.