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Why Genuine Parts (GPC) is a Great Dividend Stock Right Now
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Genuine Parts in Focus
Based in Atlanta, Genuine Parts (GPC - Free Report) is in the Auto-Tires-Trucks sector, and so far this year, shares have seen a price change of 4.83%. The auto and industrial parts distributor is paying out a dividend of $1 per share at the moment, with a dividend yield of 2.76% compared to the Automotive - Replacement Parts industry's yield of 2.78% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $4 is up 5.3% from last year. Over the last 5 years, Genuine Parts has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Genuine Parts's current payout ratio is 43%. This means it paid out 43% of its trailing 12-month EPS as dividend.
GPC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $9.92 per share, with earnings expected to increase 6.32% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GPC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Why Genuine Parts (GPC) is a Great Dividend Stock Right Now
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Genuine Parts in Focus
Based in Atlanta, Genuine Parts (GPC - Free Report) is in the Auto-Tires-Trucks sector, and so far this year, shares have seen a price change of 4.83%. The auto and industrial parts distributor is paying out a dividend of $1 per share at the moment, with a dividend yield of 2.76% compared to the Automotive - Replacement Parts industry's yield of 2.78% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $4 is up 5.3% from last year. Over the last 5 years, Genuine Parts has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Genuine Parts's current payout ratio is 43%. This means it paid out 43% of its trailing 12-month EPS as dividend.
GPC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $9.92 per share, with earnings expected to increase 6.32% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GPC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).