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

Another part of the explanation might come from Genuine Parts Company (NYSE:GPC)’ other businesses. Office products and electronics haven’t been big growth areas lately, but the company’s sales of bearings and hydraulic and pneumatic components to industrial users give it valuable diversification from its auto-part focus. Strong relationships with its commercial customers have helped the company sustain its momentum, and even though the company missed estimates in its most recent quarter, CEO Tom Gallagher believes that the remainder of the year should improve from its poor first-quarter performance.

Genuine Parts dividend data by YCharts.

As you can see, Genuine Parts hasn’t been stingy with its dividends lately. After a series of tiny increases in the early 2000s, the company has accelerated its dividend growth, with increases of 10% in 2012, and almost 9% earlier this year. Yet, with the company only paying out about half its earnings in dividends, Genuine Parts’ earnings growth seems more than ample to produce further increases in dividends in the future.

When will Genuine Parts raise its dividends again?
Genuine Parts Company (NYSE:GPC) just raised its dividend in March, so it would be extraordinary for the company to boost its payout again before 2014. But as long as prospects in the industry keep improving, investors should look for good things from Genuine Parts.

The article Forget Ford! This Hidden Auto Play Is a Dividend Giant originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

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