Everyone has undoubtedly heard about the computer-chip shortage affecting everything from smartphone makers to gaming consoles. Goldman Sachs estimates nearly 170 industries are impacted by the shortage, and arguably none has been hit harder than the automotive industry.

Such carmakers as Ford, Subaru, Volkswagen Group's Audi, and General Motors have had to idle factories because they can't get enough chips for their vehicles. GM just announced it was idling most North American production for September because of the shortage.

Yet what is one industry's pain could be another's gain. And the aftermarket auto-parts business is particularly primed to see tremendous growth for the immediate future even as its long-term prospects were already bright. It is why Genuine Parts (NYSE:GPC) is my top stock to buy this month.

Man and woman jumpstarting car

Image source: Getty Images.

Rewarding shareholders for growth

Best-known as the owner of NAPA Auto Parts stores, Genuine Parts is equally well-known for its stellar record as a premier dividend stock

Having made payments to shareholders for nearly 100 years and raised the payout for 65 consecutive years, the auto-parts retailer is a member of the small group of companies known as Dividend Kings, or stocks that have hiked their dividend for at least 50 straight years.

Genuine Parts currently pays a dividend of $3.26 per share that yields a healthy 2.7% annually. With a payout ratio of 60% based on trailing earnings, or about 50% based on this year's estimates, the company generates plenty of earnings to cover the dividend.

Yet a company's free cash flow (FCF) is an even more important metric for investors than net income, and Genuine Parts has that covered as well. It pays out less than 30% of its FCF in dividends, giving it a large enough cushion to know its payout won't likely be cut.

While a steady stream of dividend income is a nice bonus for investors, the auto-parts retailer's business is poised for growth, too.

Car lot

Image source: Getty Images.

An industry in turmoil

As mentioned, the auto industry is reeling. Last year, it was crippled by the pandemic, which caused auto sales to fall approximately 14% from the prior year. While automakers were bouncing back early on, with expected 2021 new-car sales reaching a seasonally adjusted high of 18.5 million in April, supply-chain disruptions and chip shortages have caused the rebound to stall -- and automakers need to shut down production. As a result, estimated new-car sales for this year are down to 13.1 million.

Without new cars to buy, consumers will hang on to their existing vehicles much longer than they otherwise would, and so it will likely mean more sales for used cars and less for new ones. Both situations mean the cars will need to be repaired and maintained longer and more often. 

We're seeing the fallout from this situation show up in the financial results of Genuine Parts.

NAPA Auto Parts employee in store

Image source: NAPA Auto Parts.

Jacked-up sales

Genuine Parts net sales jumped 17% over the first half of 2021 while profits swung 180 degrees from the year-ago period, going from a loss of $2.96 per share to a profit of $2.85 per share at the end of June. In the second quarter alone, sales were up 25% from last year and 9% higher than the first quarter. While that's not especially surprising given the impacts the pandemic had on retail operations last year, sales are also 12% higher than the same quarter in 2019.

That's not to say Genuine Parts isn't feeling the effect of supply-chain disruptions along with the results of stringent measures by local governments to deal with the coronavirus and its latest delta variant. Comparable store sales, for example, were up 20% in the U.S. in the second quarter, but only 12% higher in Canada because key markets such as Quebec and Ontario continue to labor under harsh lockdown orders.

Yet the resilience of Genuine Parts' business and the welling-up of consumer demand for aftermarket auto parts have kept the company climbing.

A timely purchase

Genuine Parts stock still trades at a comparative discount. Shares go for 17 times next year's average earnings estimate vs. 22 for the S&P 500. Considering the market pressures on the auto industry and the solid financial footing this company enjoys, Genuine Parts is my top stock to buy in September.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.