Genuine Parts Company will post a profit on April 22nd
Auto and industrial parts companies Genuine Parts Company (NYSE: GPC) won’t be on the winning list until April 22nd. But with the company just confirming that release date, the stock seems worth checking out, especially since many Americans may be using their stimulus checks on auto repairs.
On the charts, Genuine Parts stock hit a record high of $ 118.83 on March 8th. Stocks have since consolidated below $ 120, but their 10-day moving average appears to be dealing with sharp setbacks. The GPC is up 90% year over year, so potentially a shift in analyst sentiment – six out of seven maintaining their “hold” or “strong sell” ratings – could help the stock hit new heights.
The company managed to beat earnings expectations in three of its four most recent earnings reports. For the first quarter of 2020, Genuine Parts missed analysts’ estimates by a margin of $ 0.15 and reported earnings per share of $ 0.92. For the second quarter of 2020, GPC increased its earnings per share to $ 1.32, beating expectations with a margin of $ 0.39.
For the third quarter of 2020, Genuine Parts Company reported another surge in earnings, rising to $ 1.63 per share, beating estimates by $ 0.23. In its most recent quarterly report, GPC reported earnings per share of $ 1.52, beating expectations by $ 0.17. Additionally, Genuine Parts Company offers a forward dividend of $ 3.26 and a dividend yield of 2.84%.
From a value standpoint, stocking Genuine Parts is an intriguing turnaround game. Although the company closed fiscal 2020 with a net loss of $ 29 million, Genuine Parts stock is already estimated to have a price-to-earnings-ratio of 20.41. In addition, the Genuine Parts Company was able to grow its sales quickly before the pandemic. GPC had sales of over $ 3 billion between FY 2017 and FY 2019, an increase of 19%.
The bottom line, however, was that Genuine Parts’ net income lacked this growth rate. Aside from losing around $ 650 million in net income in fiscal 2020, GPC saw a $ 190 million decline in fiscal 2019. In addition, the company has considerable debt. The total debt is $ 3.74 billion. Meanwhile, her balance sheet contains only $ 990 million in cash. Overall, Genuine Parts stock has a fair share of the potential risk, but offers a good dividend yield and reasonable growth potential to make up for it.