November 26, 2025 a 07:47 am
GPC: Dividend Analysis - Genuine Parts Company
Genuine Parts Company maintains an impressive dividend streak with a record of uninterrupted payments for 43 years, showing a formidable reliability in shareholder returns. Their consistent dividend growth over the decades reflects a solid financial health, though a slightly elevated payout ratio warrants cautious optimism concerning future dividend sustainability. With a current yield of 3.20%, it stands out as a choice for income-focused investors seeking both stability and moderate growth.
📊 Overview
Genuine Parts Company operates in a robust sector with a diverse profile that supports continued dividend payouts. By providing a sustainable and consistent dividend, the company aligns itself with shareholder expectations for steady income.
| Metric | Value |
|---|---|
| Sector | Retail and Wholesale |
| Dividend yield | 3.20% |
| Current dividend per share | 3.99 USD |
| Dividend history | 43 years |
| Last cut or suspension | 1986 |
📈 Dividend History
The consistency of GPC's dividend payments underscores its commitment to returning value to shareholders. Tracking dividend history gives potential investors insights into the company’s resilience and its strategy in income distribution over time.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 4.12 |
| 2024 | 4.00 |
| 2023 | 3.80 |
| 2022 | 3.58 |
| 2021 | 3.26 |
📉 Dividend Growth
With both 3-year and 5-year average dividend growth rates proving positive, the company has shown capability in increasing shareholder value via enhanced payouts. This consistent growth trajectory is critical for long-term investors focused on income escalation over time.
| Time | Growth |
|---|---|
| 3 years | 7.06% |
| 5 years | 5.57% |
The average dividend growth is 5.57% over 5 years. This shows a moderate but steady dividend growth.
✅ Payout Ratio
A higher payout ratio can signify future constraints in dividend growth. For GPC, maintaining an EPS payout ratio of 68.58% suggests a sizable portion of earnings is allocated to dividends. However, the free cash flow payout ratio significantly exceeds 100%, indicating reliance on retained earnings or new income streams to support ongoing dividend increases.
| Key Figure | Ratio |
|---|---|
| EPS-based | 68.58% |
| Free cash flow-based | 415.29% |
🗣️ Cashflow & Capital Efficiency
Evaluating cash flow efficiency supports understanding GPC’s dividend-paying capability. Despite moderate free cash flow yields, the balance between operating cash flow and capital expenditures suggests room for enhancing capital leverage efficiently.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 4.59% | 4.75% | 4.21% |
| Earnings Yield | 4.82% | 6.77% | 5.56% |
| CAPEX to Operating Cash Flow | 0.23 | 0.36 | 0.45 |
| Stock-based Compensation to Revenue | 0.17% | 0.25% | 0.17% |
| Free Cash Flow / Operating Cash Flow Ratio | 76.84% | 64.29% | 54.66% |
The free cash flow coverage of dividends is slightly pressured, reflecting on the strategic cash management to balance additional expenses and growth initiatives.
🗣️ Balance Sheet & Leverage Analysis
Analyzing leverage and liquidity ratios highlights GPC’s financial stability, which impacts its dividend-paying ability. The debt structuring and liquidity positions are fundamental to long-term financial sustainability and risk management.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 1.099 | 1.110 | 1.324 |
| Debt-to-Assets | 0.252 | 0.272 | 0.298 |
| Debt-to-Capital | 0.524 | 0.526 | 0.570 |
| Net Debt to EBITDA | 1.761 | 1.754 | 3.131 |
| Current Ratio | 1.147 | 1.227 | 1.137 |
| Quick Ratio | 0.569 | 0.630 | 0.509 |
| Financial Leverage | 4.352 | 4.083 | 4.446 |
The leverage ratios underscore a strategic management of debt, necessary to maintain solvency and adequate liquidity while pursuing growth opportunities.
🗣️ Fundamental Strength & Profitability
Evaluating operational efficiency metrics offers insight into Genuine Parts Company’s ability to convert movements in revenue into profitable outcomes, sustaining its dividend policy.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 31.20% | 29.91% | 20.84% |
| Return on Assets | 7.17% | 7.33% | 4.69% |
| Net Profit Margin | 5.35% | 5.70% | 3.85% |
| EBIT Margin | 7.45% | 7.82% | 5.42% |
| EBITDA Margin | 9.03% | 9.34% | 7.16% |
| Gross Margin | 35.03% | 35.90% | 36.29% |
| Research & Development to Revenue | 0.00% | 0.00% | 0.00% |
Profitability measures reflect an efficient operation, with reasonable returns on both assets and equity ensuring continued financial strength to support dividends.
📊 Price Development
🏆 Dividend Scoring System
| Category | Score | Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 2 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Total Score: 29/40
⭐ Rating
Genuine Parts Company upholds a strong tradition of reliable dividend payouts, maintaining commendable stability. While the payout ratio suggests some caution, overall, GPC affords a dependable option for investors emphasizing income alongside moderate growth potential. Carefully monitoring the cash flow trends will remain essential to sustain the dividend payout in the longer term. Therefore, GPC is recommended as a reliable hold for income investors, contingent on stability in cash flows.