O’Reilly Automotive Inc (ORLY), AutoZone, Inc. (AZO): Which Auto Parts Chain Is a Good Buy Now?

Looking forward, O’Reilly Automotive Inc (NASDAQ:ORLY) expects to grow the market share in existing markets while expanding the business by opening 190 new stores in 2013. AutoZone, Inc. (NYSE:AZO) would also grow its business by growing its retail sales using inventory more effectively across the business network. It also targets to capture commercial sales with the focus on building the best B2B sales organization. At the same time, AutoZone will keep managing costs to operate more efficiently. For Advance Auto Parts, Inc. (NYSE:AAP), the company also expects some growth in the business in 2013 with modest gross profit improvement. Excluding its recent BWP acquisition, the company expects to generate around $375 million in free cash flow. The EPS is expected come in at $5.30 to $5.45 per share.

My Foolish take

All three seem to be good stocks for investors to hold in the long run. As the industry is quite fragmented, O’Reilly Automotive Inc (NASDAQ:ORLY), AutoZone, Inc. (NYSE:AZO), and Advance Auto Parts, Inc. (NYSE:AAP) are in good positions to be the consolidators of the industry by acquiring smaller players. Personally, I like Advance Auto the most with its lowest valuation, the most conservative capital structure, and decent profitability.

Anh HOANG has no position in any stocks mentioned. The Motley Fool owns shares of O’Reilly Automotive.

The article Which Auto Parts Chain Is a Good Buy Now? originally appeared on Fool.com.

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