Ingersoll Rand (IR) is a reliably "boring" cash cow; the firm makes its living in HVAC — heati...
Genuine Parts: Dividends Since 1948
05/10/2017 2:50 am EST
Founded in 1925 and headquartered in Atlanta, Georgia, Genuine Parts Company (GPC) distributes automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials, says Vita Nelson, dividend reinvestment specialist and editor of DirectInvesting.
Its long history of consistent revenues and earnings growth makes it a strong company. It is considered a solid, well diversified business with durable competitive advantage, that also enjoys a solid corporate culture.
According to Yahoo! Finance, consensus estimates call for the company to earn about $4.76 per share this year, up from $4.61 last year, and to go to about $5.18 next year.
Genuine Parts Co. has paid dividends to investors since 1948, and has increased its payments for 60 consecutive years, which makes it a dividend aristocrat. During the past five years it has increased its dividends at an average rate of 7.5%, and its quarterly payment of $0.675 currently provides a yield of 2.84%.
To illustrate the value of dividends reinvestment: A hypothetical investment in GPC has grown cumulatively (including dividends reinvested) 5,925.21% during the past forty years. The same investment has grown only 2,223.67% in the same period of time, excluding dividends.
GPC still has room for significant dividend growth in the coming years, since the company's Dividend Payout Ratio (DPR), or its dividend payments as a percentage of its earnings, is just 57%. Its average Dividend Payout Ratio (DPR) during the past five years is just 52%.
Its Price to Earnings ratio (a measure of valuation) of 20.2 is 49% below its industry average, its Price to Book ratio of 4.3 is 51% below its industry average, its Price to Sales ratio of 0.9 is 59% below its industry average and its Debt to Equity ratio of 0.2 is 71% below its industry average.
Technically (from the chart’s perspective) GPC also looks attractive, trading 13.4% below its all-time high, while it is forming a long price consolidation pattern between $109 and $76 approximately, in which $76 is acting as a technical support level.
With the stock being fundamental and technically attractive, this company is an appropriate holding for investors who have a long-term investment horizon.
Related Articles on INDUSTRIALS
Nearly a century after its founding, Raytheon Company (RTN) stands as a global technology leader wit...
When the infamous criminal Willy Sutton was asked why he robbed banks, he said, “Because that&...
My latest new recommendation is Bayerische Motoren Werke Aktiengesellschaft (BMWYY), better known to...