Genuine Parts Company (GPC - Free Report) recently announced that it is implementing a number of actions to boost the firm’s cash position in the face of rising uncertainty due to the coronavirus crisis.
While most of the company’s operations remain open, business in France and New Zealand have been suspended due to precautionary government mandates.
Genuine Parts has withdrawn its 2020 guidance amid significant deterioration of the macro-economic environment triggered by the coronavirus pandemic and subsequent market uncertainties. It will re-evaluate the guidance metrics and discuss its current-year outlook during the first-quarter 2020 earnings call, scheduled for May 6.
Genuine Parts has extended its $100-million cost savings plan unveiled last October to include a number of initiatives in order to reduce labor and other costs. The company is suspending stock buybacks, in a bid to preserve financial flexibility. Nonetheless, it plans to maintain its dividend payouts, thereby preserving shareholder values. Notably, Genuine Parts announced a regular quarterly cash dividend of 79 cents per share, payable on Jul 1, to shareholders of record Jun 5, 2020.
Importantly, the company currently has $1 billion available in cash and unused credit, providing a solid cash base and headroom within its credit facilities to tackle downturns caused by production shutdowns and revenue declines.
Genuine Parts currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The coronavirus pandemic has become a concern for other global auto biggies as well, including Tesla (TSLA - Free Report) , Honda Motor (HMC - Free Report) , Toyota Motor (TM - Free Report) , Volkswagen AG, Goodyear Tire, Nissan, Harley-Davidson and Hyundai Motor. Several automakers have closed their factories and suspended production, while the others plan to change manufacturing processes and cut production levels in their plants, in line with the nationwide campaign addressing the crisis. The pandemic has not only dented consumer sentiment and thwarted vehicle demand but also distorted the supply-chain balance globally.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>