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Genuine Parts Company (GPC): Forget Ford Motor Company (F)! This Hidden Auto Play Is a Dividend Giant

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Earnings Analysis: Genuine Parts Co.(NYSE:GPC)The auto industry has been in full celebration mode lately, as the most recent figures from Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) suggest that the recovery from the near-death experience that U.S. automakers suffered during the financial crisis is largely complete. Yet, by looking beyond the automakers themselves, investors can find an even more lucrative stock that has delivered better long-term returns, and consistently raised its dividend every year for well over half a century.

Genuine Parts Company (NYSE:GPC) is hardly a household name, but you’ll find it among the largest producers of auto parts in the industry, and its NAPA Auto Parts stores are widely known among vehicle owners and mechanics alike. Unlike Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM), you’ll also find Genuine Parts Company (NYSE:GPC) on the list of Dividend Aristocrats, where admission is determined by whether a company can manage to boost its dividend payouts to shareholders every single year for at least a quarter century. Only a few dozen stocks make the cut, demonstrating their staying power even through tough times. Let’s take a closer look at Genuine Parts Company (NYSE:GPC) to see whether it can use recent success in the auto industry to sustain its long streak of rewarding dividend payouts to investors.

Dividend Stats on Genuine Parts

Current Quarterly Dividend Per Share $0.5375
Current Yield 2.8%
Number of Consecutive Years With Dividend Increases 57 years
Payout Ratio 49%
Last Increase March 2013

Source: Yahoo! Finance. Last increase refers to ex-dividend date.

What’s up with Genuine Parts lately?
Genuine Parts Company (NYSE:GPC) hasn’t hesitated to share its wealth with shareholders lately, both in terms of its dividend, and through share-price increases. The stock has soared more than 30% so far this year as the company benefits from the overall strength in the industry.

What’s interesting, though, is that historically, auto-parts makers are seen as relying on the lack of success among automakers. After all, new cars don’t need parts nearly as often as older cars do, and when Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) perform well, their customers don’t have to rely as much on Genuine Parts or competitors AutoZone, Inc. (NYSE:AZO) and Advance Auto Parts (NYSE:AAP) for replacements. Yet, even though Advance’s 15% gain, and AutoZone, Inc. (NYSE:AZO)’s 20% rise year to date, aren’t quite as substantial as Genuine Parts Company (NYSE:GPC), they still signal a paradigm shift in the way investors look at the industry, perhaps recognizing that for every new car sold, there’s usually a used car that gets traded in, and so good news for Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) sales might actually translate into more business for the parts industry.

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