Yahoo Finance Genuine Parts Co's Dividend Analysis
Exploring the Sustainability and Growth of Genuine Parts Co's Dividends
Genuine Parts Co (NYSE:GPC) recently announced a dividend of $1 per share, payable on 2024-07-01, with the ex-dividend date set for 2024-06-07. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Genuine Parts Co's dividend performance and assess its sustainability.
What Does Genuine Parts Co Do?
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Genuine Parts sells aftermarket automotive parts (about 60% of sales) and industrial products (40% of sales) in the United States and internationally. The automotive segment primarily acts as a distributor to its network of 9,800 global retail locations of which about two thirds are independently owned and operated. we estimate Genuine serves around 6,000 retail locations in the US operating under the Napa Auto Parts brand, with about 80% of sales derived from professional customers. Its industrial segment, primarily operating under the Motion banner in the United States, serves as a leading distributor of bearings, power transmission, and other industrial products to over 200,000 maintenance, repair, and original equipment manufacturer clients.
A Glimpse at Genuine Parts Co's Dividend History
Genuine Parts Co has maintained a consistent dividend payment record since 1957. Dividends are currently distributed on a quarterly basis.
Genuine Parts Co has increased its dividend each year since 1957. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 67 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Genuine Parts Co's Dividend Yield and Growth
As of today, Genuine Parts Co currently has a 12-month trailing dividend yield of 2.69% and a 12-month forward dividend yield of 2.80%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Genuine Parts Co's annual dividend growth rate was 6.30%. Extended to a five-year horizon, this rate decreased to 5.60% per year. And over the past decade, Genuine Parts Co's annual dividends per share growth rate stands at 5.60%.
Based on Genuine Parts Co's dividend yield and five-year growth rate, the 5-year yield on cost of Genuine Parts Co stock as of today is approximately 3.53%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, Genuine Parts Co's dividend payout ratio is 0.41.
Genuine Parts Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Genuine Parts Co's profitability 8 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Genuine Parts Co's growth rank of 8 out of 10 suggests that the company 's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Genuine Parts Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Genuine Parts Co's revenue has increased by approximately 12.80% per year on average, a rate that outperforms than approximately 56.04% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Genuine Parts Co's earnings increased by approximately 21.00% per year on average, a rate that outperforms than approximately 56.76% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.70%, which outperforms than approximately 59.76% of global competitors.
Conclusion
Considering Genuine Parts Co's consistent dividend payments, robust dividend growth rate, sustainable payout ratio, strong profitability, and solid growth metrics, the company presents a compelling case for dividend investors. These factors not only underscore the reliability of current dividends but also hint at the potential for future growth. For those looking to diversify their income-generating portfolio, Genuine Parts Co warrants a closer look.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
