What happened
Shares of Genuine Parts (GPC 11.22%) gained 23.8% in 2022, according to data from S&P Global Market Intelligence, as the auto industry continued to suffer from the global semiconductor shortage and supply chain issues.
As both new and used vehicles were harder to find, which caused prices to soar to record levels, consumers committed to keeping their existing vehicles on the road longer, driving demand for aftermarket auto parts.
Image source: Getty Images.
So what
Genuine Parts is the owner of the 9,600 retail stores that primarily operate under the NAPA Auto Parts banner. It also runs an industrial replacement parts and supplies business serving more than 107,000 customers around the world.
The auto market took it on the chin last year with total full-year sales falling 7.8% to 13.9 million units. Truck and SUV sales were down 6.4% while passenger cars tumbled 12.8%.
The average cost of a new vehicle ended 2022 at $46,382, a new record high and 2.5% above the year-ago figure. The price tag for the average used car was $27,500 in December, 35% higher than last year, but down from its peak. Used car inventory was down 15% from the year-ago period.
Amid rampant inflation, rising interest rates, and elevated gas prices in 2022, customers opted to keep their old cars in working order for the time being.
Now what
That was reflected in Genuine Parts' financial statements, which saw net sales hit a record $16.6 billion over the first three quarters of the year, an 18% increase from the same point one year ago, while earnings hit $6.53 per share, a 47% gain.
Yet as strong as Genuine Parts' auto parts business was, it saw even stronger growth in its industrial parts business, which was up 35% year to date. The segment saw its sixth consecutive quarter of double-digit comparable sales growth.
One of the more attractive aspects of an investment in the aftermarket auto parts retailer is its dividend, which currently yields 2.1% annually. It has made a dividend payment to shareholders for over 100 years and has increased the payout every year since 1948.
That 74-year record is one of the best of any stock on the market, and qualifies the company as a Dividend King, or a company that has increased its dividend for 50 years or more.
