Buy, Sell, or Hold This Auto Parts Titan?

Genuine Parts is a leader in the auto parts business, but does it have what it takes to earn a spot in your portfolio?

Chuck Saletta
Chuck Saletta
Jul 28, 2014 at 10:15AM
Consumer Goods

Genuine Parts (NYSE:GPC) primarily operates in the competitive business of selling auto parts. It faces stiff competition from the likes of Advanced Auto Parts, AutoZone, O'Reilly Automotive, and Pep Boys.

In a competitive market like that, it's tough to stand out from the crowd, but as the table below shows, Genuine Parts outshines those competitors on several key investor-relevant measures:

CompanyTrailing-12-Month RevenueDividend YieldDividend Growth HistoryDebt/Equity Ratio
Genuine Parts $14.7 billion 2.6% 58 years of increases 0.2
Advanced Auto Parts $7.5 billion 0.2% Flat since 2006 1.2
AutoZone $9.5 billion 0% N/A Negative equity
O'Reilly Automotive $6.9 billion 0% N/A 0.7
Pep Boys $2.1 billion 0% N/A 0.6

Data from Yahoo! Finance as of July 26, 2014.

Genuine Parts has the only record of dividend increases among the bunch, and is the only one other than Advanced Auto Parts to directly reward its investors with dividends. Genuine Parts also has the most solid balance sheet of the group, but only AutoZone has much to worry about from a balance sheet perspective.

While Genuine Parts' overall revenue is substantially larger than that of the other auto parts retailers, it also has three additional business lines to help. Looking just at its auto parts business, Genuine Parts had less revenue than AutoZone and is closer in size to Advanced Auto Parts and O'Reilly Automotive.

While it looks decent compared to its peers, whether it's worth owning on its own depends on whether it looks capable of continuing to reward its shareholders in the future. Check out the slideshow below to find out.