Morningstar Rating

Stock Research and Analysis

by Liang Feng

Bulls Say

Genuine Parts has been a consistent free cash flow generator for decades, enabling more than 50 years of consecutive dividend growth.
GPC can use acquisitions to drive value, since it can drive scale efficiencies by acquiring subscale players in the fragmented industrial marketplace.
The company's automotive segment should benefit from an increase in the average age (roughly 11 years) of vehicles on the road in the U.S. and Australia, plus any increase in vehicle miles driven. Read more 

Bears Say

Increasing demand for new cars could increase the scrappage rates for existing vehicles and reduce demand for aftermarket replacement parts.
Motion Industries' sales have decelerated because of declining demand in cyclical MRO end markets, such as mining. Given the high levels of capacity additions over the past five years, it is uncertain whether this demand will return anytime soon.
Demand for intermediary distribution services could be disrupted as more vertically integrated competitors generate high returns on new invested capital from aggressive store expansion. Read more 

Management

We assign Genuine Parts a Standard Stewardship Rating. We are impressed by management's proven ability to create returns for shareholders in the form of cash dividend increases and share repurchases. The board of directors has 12 members, the majority   Read more 

Profile

Genuine Parts Company distributes automotive (53% of sales, including Exego) and industrial (31%) replacement parts, electrical/electronic products (12%), and office products   Read more 

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3 Picks in a Richly Valued Market 
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