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Genuine Parts (GPC) is a Top Dividend Stock Right Now: Should You Buy?
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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
Headquartered in Atlanta, Genuine Parts (GPC - Free Report) is an Auto-Tires-Trucks stock that has seen a price change of -11.75% so far this year. Currently paying a dividend of $0.95 per share, the company has a dividend yield of 2.48%. In comparison, the Automotive - Replacement Parts industry's yield is 1.05%, while the S&P 500's yield is 1.67%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.80 is up 6.1% from last year. Genuine Parts has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 5.62%. 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.
Earnings growth looks solid for GPC for this fiscal year. The Zacks Consensus Estimate for 2023 is $9.24 per share, which represents a year-over-year growth rate of 10.79%.
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. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that GPC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Genuine Parts (GPC) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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
Headquartered in Atlanta, Genuine Parts (GPC - Free Report) is an Auto-Tires-Trucks stock that has seen a price change of -11.75% so far this year. Currently paying a dividend of $0.95 per share, the company has a dividend yield of 2.48%. In comparison, the Automotive - Replacement Parts industry's yield is 1.05%, while the S&P 500's yield is 1.67%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.80 is up 6.1% from last year. Genuine Parts has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 5.62%. 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.
Earnings growth looks solid for GPC for this fiscal year. The Zacks Consensus Estimate for 2023 is $9.24 per share, which represents a year-over-year growth rate of 10.79%.
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. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that GPC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).