Genuine Parts (NYSE: GPC) is one of the largest auto parts companies in the United States, and long-term investors can earn a high dividend (4.5% yield) by buying at the current price. Its core business is the auto parts brand NAPA, but the company has been hard hit by the coronavirus crisis and has had its share of problems with its own product line.
Genuine Parts reported quarterly results on May 6, and while total revenue for the quarter fell 3.7%, revenue excluding divestments rose 1%. Comparable revenue decreased 5% in the first quarter due to a decrease in NAPA and other parts and services sales and a $1.5 million loss.
Due to the ongoing coronavirus crisis, the company expects further declines in the current quarter. It has taken several steps to overcome the downturn, such as launching a new product line and selling some of its older products.
The company also has a manageable total debt of $298 million through 2021, and it has $1.1 billion in available liquidity with a revolving credit capacity of about $500 million.
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Genuine Parts has also suspended its share buybacks to save money and reduced its investments by 35% to 50% by 2020. With $1.1 billion in cash and $2.5 billion in assets under management, investors can also think long-term.
Why Genuine Parts (NYSE: GPC) is Strong Dividend Stock Buy
Genuine Parts is one of the leading brands in the growing automotive and service industries. The aging U.S. vehicle fleet will benefit from the company’s expertise in parts manufacturing, repair and service, as well as its strong customer base.
According to a recent company presentation, there are 1.5 million vehicles aged 1 to 5 years in the United States, and this age increases to 829 vehicles older than 6 years. Instead of buying a new vehicle, consumers are increasingly having their cars repaired by trained professionals to keep them on the road longer.
This trend will allow Genuine Parts to continue its dominance in the automotive repair market for the foreseeable future. Although this trend may initially be negative because consumers are holding on to their cars for longer, this is a big advantage for GPC.
The GPC stock has increased its dividend for 64 consecutive years and has a high yield of 4.5%. Genuine Parts stock is a great investment for investors looking for current returns and dividend growth. All of these factors have now made this stock my fifth most popular dividend hero, with a dividend yield of 4.5% and an average annual dividend growth rate of 3.7%.
Genuine Parts (NYSE: GPC) Stock Price Recommendations
Apr-08-20 Upgrade BofA/Merrill Neutral → Buy $85 → $78
Apr-01-20 Downgrade Stephens Overweight → Equal-Weight
Oct-25-19 Downgrade Goldman Neutral → Sell $101 → $93
Oct-08-19 Initiated Raymond James Mkt Perform
Jul-11-19 Initiated Goldman Neutral $107
May-31-19 Initiated Stephens Overweight
Mar-20-19 Initiated Evercore ISI In-line $110
Jan-09-19 Upgrade BofA/Merrill Underperform → Neutral
Oct-30-18 Downgrade BofA/Merrill Neutral → Underperform
Apr-17-18 Initiated Guggenheim Neutral
Apr-13-18 Upgrade BofA/Merrill Underperform → Neutral
Feb-21-18 Reiterated JP Morgan Neutral $114 → $107
Dec-04-17 Initiated MoffettNathanson Sell
Oct-20-17 Reiterated RBC Capital Mkts Sector Perform $98 → $95
Sep-26-17 Reiterated RBC Capital Mkts Sector Perform $85 → $98
Jul-21-17 Upgrade Gabelli & Co Hold → Buy
Jul-06-17 Downgrade Goldman Neutral → Sell $104 → $89
Apr-20-17 Reiterated RBC Capital Mkts Sector Perform $94 → $96
Jan-19-17 Upgrade Goldman Sell → Neutral
Dec-14-16 Initiated Atlantic Equities Neutral
1 Day Genuine Parts (NYSE: GPC) Stock Moving Averages
Name Value Action
Exponential Moving Average (5) 78.48 Buy
Simple Moving Average (5) 78.07 Buy
Exponential Moving Average (10) 77.01 Buy
Simple Moving Average (10) 75.66 Buy
Exponential Moving Average (20) 75.81 Buy
Simple Moving Average (20) 76.09 Buy
Exponential Moving Average (30) 75.39 Buy
Simple Moving Average (30) 75.28 Buy
Exponential Moving Average (50) 76.37 Buy
Simple Moving Average (50) 71.39 Buy
Exponential Moving Average (100) 81.39 Buy
Simple Moving Average (100) 83.13 Sell
Exponential Moving Average (200) 87.91 Sell
Simple Moving Average (200) 91.29 Sell
Ichimoku Cloud Base Line (9, 26, 52, 26) 75.19 Neutral
Volume Weighted Moving Average (20) 75.78 Buy
Hull Moving Average (9) 79.71 Buy