About Genuine Parts Company
Genuine Parts Company is one of the leading distributors of auto replacement parts in the United States, Canada and Mexico. Genuine Parts was founded in 1928 and is based in Atlanta, GA. The company started as an auto parts distributor and since its founding has diversified its operations into four divisions:
- The Automotive Parts Group is Genuine Parts’ largest group, with 53% of the company’s net sales. It is responsible for distributing auto replacement parts through its brands, NAPA (in the U.S.), NAPA Canada/UAP Inc. (in Canada) and Auto Todo (in Mexico). The Automotive Parts Group distributes heavy vehicle parts under the business name TW Distribution and Traction, and conducts its import parts distribution operations under the Altrom brand name.
- The Industrial Parts Group (31% of net sales) operates under the name Motion Industries and distributes parts under a just-in-time delivery model to its customers.
- The Office Products Group (12% of net sales) distributes over 50,000 business products to office product resellers.
- The Electrical/Electronic Materials Group (4% of net sales) is a leading distributor of production supplies and value-added fabricated parts such as adhesives, hand and soldering tools, motors and bearings. The group’s customers are in the telecom, marine, oil and gas, and other fields.
In 2013, Genuine Parts recorded net income of $685 million, which was up 5.7% from 2012. The $14.1 billion of sales in 2013 were up 8.2% from 2012 numbers.
The company is a member of the S&P 500 index and a Fortune 500 company, and trades under the ticker symbol GPC.
Genuine Parts Company’s Dividend and Stock Split History
Genuine Parts has one of the longest dividend growth records of all publicly traded companies, with increases in the annual dividend since 1957. Genuine Parts met the Dividend Aristocrat criteria of 25 consecutive years of increasing regular dividend payments in 1981. Genuine Parts Company announces dividend increases in the first quarter of the calendar year and, at the beginning of 2014 increased the quarterly dividend by 7.0%, from 53.75 cents to 57.50 cents per share resulting in a projected annual dividend of $2.30 for 2014. I expect Genuine Parts to announce their next dividend increase in February and to pay out the new dividend at the beginning of April 2015.
Genuine Parts stock has a history of moderate dividend increases, with dividend growth below 10% annually since at least 1994. From 2009 – 2014, Genuine Parts has grown its dividend from $1.60 to $2.30 per share, for a 5-year compounded annual dividend growth rate (CADGR) of 7.53%. The company’s 10-year and 20-year CADGRs are slightly less: 6.72% and 5.62%, respectively.
Genuine Parts Company has split its stock 10 times since 1959. Most recently, the company split its stock in April 1997, 3-for-2. Other 3-for-2 stock splits occurred in April 1992, May 1987, April 1984, April 1979, May 1970 and December 1967. Genuine Parts also split its stock 2-for-1 in May 1972 and March 1959, and 3-for-1 in April 1962.
From mid-2009 to mid-2014, Genuine Parts stock appreciated at an annualized rate of 22.5%, from about $30 to $83 over that time. This has outpaced the 14.3% annualized return of the S&P 500 during the same time.
Direct Purchase and Dividend Reinvestment Plans
Genuine Parts Company has both direct purchase and dividend reinvestment plans. The company has created a very favorable pair of plans for investors. First, there is no fee to start investing through the plans. Second, when you buy or sell shares, you’ll pay 8 cents per share for each transaction. Genuine Parts pays all other transaction fees. There is a minimum investment level of $10 for each direct purchase. In general, you can minimize your fees by buying and selling shares in larger quantities.