Stellantis (NYSE: STLA) isn’t the first name most income investors think of, yet the Italian‑French‑American automaker pays a very appetizing 8.08% dividend yield and has been pouring cash back to shareholders at a double‑digit rate.
Beneath the headline yield, though, lie a few little‑known quirks, ranging from Dutch withholding taxes to an EV partnership that suddenly turns a Polish plant into one of Europe’s cheapest battery‑car factories.
We dive in to figure out if Stellantis is worth owning for the income and upside.
An 8 % Cash Yield That Lands in Your Account Only Once a Year
The current payout that the board proposed for an ordinary dividend of €0.68 per share, or about $0.77. At the present $9.55 share price, that’s roughly 8.0 %.
However the yield looks pretty volatile and that’s because Stellantis sets its dividend at 25 % of the prior year’s net income. When profits were booming a couple of years ago, the company paid €1.55; after a tough 2024 it reset to €0.68.
That highlights how timing matters because the payment comes once each May, not quarterly, which means investors who buy after the April ex‑dividend date wait a full year for the next check.
There’s also a hidden wrinkle in that as a Dutch‑resident company, Stellantis withholds 15 % Dutch dividend tax. U.S. investors can usually claim a credit in taxable accounts, but IRA holders cannot.
Buybacks Turbo‑Charge the True Shareholder Yield
Even after the ordinary dividend, management returned another €3 billion via buybacks last year, retiring roughly 5 % of the share count.
Although buybacks have been paused this year while profits regroup, the board has a standing authorization to repurchase up to 10 % of shares when cash piles up again.
Put the two levers together and the combined cash plus buyback yield topped 13 % last year, making it one of the richest shareholder‑return programs in the global auto sector.
A Net‑Cash Balance Sheet Few Rivals Can Match
Despite a brutal 70 % profit drop in 2024, Stellantis finished the year with €15.1 billion of industrial net cash and a gargantuan €49.5 billion liquidity war chest.
That cushion is why the dividend survived the downturn and why credit‑rating agencies still keep the company in investment‑grade territory. At Fitch for example the rating BBB is stable.
Catalysts Most Investors Haven’t Noticed
| Hidden Catalyst | Why It Matters | Timeline |
|---|---|---|
| Leapmotor JV – Stellantis owns 51 % of “Leapmotor International” | First Chinese EVs rolling off the Tychy, Poland line cost €400–€500 per unit to assemble, cheaper than Italy and on par with China, giving Stellantis a cost edge in Europe’s price war. | Mass production Sept 2024; 2nd model Q1 2025 |
| Comau divestiture | Sale of 50.1 % stake in the robotics arm to One Equity Partners frees cash and lets Stellantis book a gain that could support future special distributions. | Closed Dec 2024 |
| Merger synergies still compounding | Management beat its original €5 billion synergy target two years early, hitting €7.1 billion by 2022; every incremental euro now drops largely to the bottom line. | Ongoing |
Beyond the IRA Glitch, What Else Is Worrisome?
Auto cyclicality stands out as a chief risk for shareholders. For example last year’s 70 % earnings plunge shows how quickly pricing power can evaporate when inventories rise.
EV transition costs are another worry for investors because Stellantis’ mid‑single‑digit margin guidance for 2025 emphasizes the expensive shift to its STLA multi‑energy platforms.
At a higher level, policy risk can’t be ignored, not least because extra EU tariffs on Chinese EVs hit Leapmotor exports with a 21 % duty starting July 2024, potentially diluting the cost advantage.
There’s also a currency and withholding drag to be factored in. Euro‑denominated payouts plus Dutch tax can shave several percentage points off a U.S. investor’s effective yield.
Is Stellantis a Good Dividend Stock to Buy Right Now?
If you’re hunting for high current income backed by an unusually fortress‑like balance sheet in the cyclical auto space, Stellantis belongs on your radar with an 8 % cash yield. It is sustainable under the company’s 25 % payout formula, and when earnings rebound the dividend should too.
Add the latent value in cost‑saving synergies, a freshly monetized robotics stake, and a stealthy EV production beachhead in Poland, and Stellantis offers upside catalysts most dividend screens gloss over.
That said, this is still an automaker and so profits and distributions will swing with the cycle, and the Dutch tax bite means every investor should run after‑tax scenarios. For income seekers comfortable with those caveats, Stellantis looks like an undervalued, cash‑gushing contrarian buy but only if you buckle up for a bumpy ride.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.