Dividend Kings In Focus: Genuine Parts – Sure Dividend

Up to date on July ninth, 2025 by Nathan Parsh

An organization will need to have a protracted monitor report of producing regular dividend progress, even throughout recessions, to develop into a dividend king. That is removed from a straightforward activity, which makes it all of the extra spectacular.

It ought to be no shock that we contemplate the Dividend Kings to be among the many highest-quality dividend shares in the complete inventory market.

With this in thoughts, we created a full listing of all 55 Dividend Kings, together with vital monetary metrics similar to dividend yields, payout ratios, and price-to-earnings ratios. You’ll be able to obtain the complete listing by clicking on the hyperlink beneath:

Real Components Firm (GPC) has elevated its dividend for 69 consecutive years, giving it one of many longest streaks of annual dividend raises in the complete inventory market. It has achieved this progress with a high model in an business that has seen constant progress over a few years. A transparent path stays forward for continued progress, notably as automobiles age.

Real Components inventory seems barely undervalued at current, providing a yield above the market common and a excessive chance of continued dividend hikes for a few years, along with a sturdy progress forecast.

Enterprise Overview

Real Components traces its roots again to 1928, when Carlyle Fraser bought Motor Components Depot for $40,000. He renamed it, Real Components Firm. The unique Real Components retailer had annual gross sales of simply $75,000 and employed solely six folks.

Immediately, Real Components has the world’s largest world auto components community, with greater than 10,800 areas worldwide. As a significant distributor of automotive and industrial components, Real Components generates annual income of practically $24 billion.

Supply: Investor Presentation

It operates two segments: automotive (which incorporates the NAPA model) and the economic components group, which sells industrial alternative components to MRO (upkeep, restore, and operations) and OEM (authentic gear producer) clients. Clients are derived from a variety of segments, together with meals and beverage, metals and mining, oil and fuel, and well being care.

On April 22, 2025, the corporate reported its first-quarter 2025 outcomes, with gross sales reaching $5.9 billion, a 1.7% enhance from the identical interval within the earlier yr. Nonetheless, web revenue fell to $194 million, or $1.40 per diluted share, down from $249 million, or $1.78 per diluted share, in Q1 2023. Adjusted diluted earnings per share (EPS) additionally decreased to $1.75 in comparison with $2.22 final yr. Restructuring expenses and the continuing integration of acquired impartial automotive shops drove this decline.

Section-wise, Real Components’ Automotive Components Group skilled a 2.5% enhance in gross sales to $3.7 billion, with acquisitions making a major contribution. Comparable gross sales fell 0.8% whereas the section EBITDA margin contracted 110 foundation factors to 10.7%.

In the meantime, the Industrial Components Group skilled a 0.4% decline in gross sales to $2.2 billion, and its section EBITDA margin improved 10 foundation factors to 12.7%. The corporate’s general efficiency was impacted by a 0.7% in comparable gross sales and an unfavorable impression from forex trade. Each segments had one fewer promoting day within the U.S. in comparison with the prior yr.

Real Components’ working money stream declined $41 million within the first quarter, whereas free money stream was decrease by $160 million. Nonetheless, Real Components expects free money stream of $800 to $1 billion for the yr.

For the complete yr 2025, Real Components reaffirmed its outlook, with the corporate nonetheless anticipating income progress of two% to 4% for the yr. Adjusted diluted EPS continues to be forecasted to be between $7.75 and $8.25. The corporate additionally famous that this forecast doesn’t embody any extra tariffs, which might probably act as a headwind to outcomes if carried out. That stated, Real Components stays centered on long-term investments to place itself for future progress as soon as market situations enhance.

Development Prospects

Real Components is primed for achievement, because the setting for auto alternative components is extremely supportive of progress. Shoppers are holding onto their vehicles longer and are more and more making minor repairs to maintain their vehicles on the highway for longer, slightly than shopping for new vehicles.

As the common price of auto restore will increase with a automobile’s age, this immediately advantages Real Components. As newer automobiles develop into more and more costly, clients usually tend to preserve older vehicles for longer.

Based on Real Components, automobiles aged six years or older now symbolize nearly all of vehicles on the highway, which bodes very nicely for Real Components. As well as, the overall addressable marketplace for automotive aftermarket services and products, in addition to business merchandise, is large and fragmented, leaving loads of alternative for growth.

Supply: Investor Presentation

Real Components has a large portion of the $200 billion and rising automotive aftermarket enterprise. One particular approach Real Components has captured market share on this area has traditionally been by means of acquisitions.

Real Components steadily acquires smaller firms within the U.S. and worldwide markets to spice up market share in current classes or increase into new areas. All through its historical past, Real Components has made a number of acquisitions.

Supply: Investor Presentation

These acquisitions have helped result in earnings progress in every of the final 10 years. For instance, Real Components acquired Alliance Automotive Group for $2 billion. Alliance is a European distributor of auto components, instruments, and workshop gear.

This was a gorgeous acquisition, as Alliance Automotive holds a high 3 market share place in Europe’s largest automotive aftermarkets: the U.Okay., France, and Germany. The deal added $1.7 billion of annual income to Real Components, together with extra earnings progress potential from price synergies.

In 2018, Real Components agreed to purchase Hennig Fahrzeugteile, a Germany-based provider of components for gentle and industrial automobiles. The acquisition expanded Real Components’ attain in Europe and in addition gave it additional publicity to the industrial market. Real Components expects the acquired firm to spice up its annual gross sales by $190 million.

Extra lately, Real Components has made a number of acquisitions which can be anticipated to strengthen the corporate’s management place in numerous markets. In 2019, Real Components accomplished its acquisition of PartsPoint, a number one distributor of automotive aftermarket components and equipment primarily based within the Netherlands.

The corporate accomplished its buy of main industrial distributor Inenco in 2019. Inenco has operations in Australia, New Zealand, and Indonesia. Later that month, Real Components introduced it was including Todd Group, a frontrunner within the heavy-duty aftermarket section in France.

In 2022, the corporate accomplished its $1.3 billion acquisition of Kaman Distribution Group, increasing its portfolio of alternative components.

Real Components divested its S.P. Richards US operations and its Security Zone and Impression Merchandise operations in 2020. It continues to optimize its portfolio, specializing in its core automotive and industrial components companies.

Total, Real Components’ a number of acquisitions have clearly contributed to the corporate’s long-term progress. The outcomes of Real Components’ progress technique converse for themselves. We anticipate Real Components to generate 8% annual earnings-per-share progress over the following 5 years.

Aggressive Benefits & Recession Efficiency

The most important problem going through the financial system continues to be provide chain points stemming from the pandemic; nonetheless, because the financial system recovers, Real Components’ outcomes are additionally bettering. To date, Real Components seems to not have been closely impacted by these points.

The opposite menace to bodily retailers is e-commerce competitors, however automotive components retailers similar to NAPA should not uncovered to this threat. Automotive repairs are sometimes complicated, difficult duties. NAPA is a number one model, thanks partly to its repute for high quality merchandise and repair. It’s precious for purchasers to have the ability to ask inquiries to certified workers, which supplies Real Components a aggressive benefit.

Real Components has a management place throughout its companies. All of its working segments symbolize the #1 or #2 model in its respective class. This results in a powerful model and regular demand from clients.

Real Components’ earnings-per-share in the course of the Nice Recession are beneath:

2007 earnings-per-share of $2.98
2008 earnings-per-share of $2.92 (2.0% decline)
2009 earnings-per-share of $2.50 (14% decline)
2010 earnings-per-share of $3.00 (20% enhance)

Earnings per share declined considerably in 2009, which ought to come as no shock. Shoppers are likely to tighten their belts when the financial system enters a downturn.

That stated, Real Components remained extremely worthwhile all through the recession and returned to progress in 2010 and past. The corporate additionally generated money stream in the course of the coronavirus pandemic, which allowed it to boost its dividend in 2020.

Given their consumable nature, there has all the time been a sure degree of demand for automotive components, which supplies Real Components’ earnings a excessive flooring.

Valuation & Anticipated Returns

Primarily based on our anticipated earnings per share of $7.75 for 2025, Real Components has a price-to-earnings ratio of 16.4. Our honest worth estimate for Real Components is a price-to-earnings ratio of 15.0. In consequence, Real Components seems overvalued at the moment. A number of contractions may cut back annual returns by 1.8% per yr over the following 5 years.

Luckily, Real Components’ whole returns may even embody earnings progress and dividends.

We anticipate Real Components to develop its earnings per share by 8% yearly over the following 5 years. The inventory has a 3.2% present yield, which is considerably increased than the common yield of the S&P 500 Index. Moreover, Real Components raises its dividend every year, together with a 3% enhance in 2025. Real Components Firm’s dividend progress streak now stands at 69 consecutive years.

Real Components has a extremely sustainable dividend. The corporate has paid a dividend yearly since its preliminary public providing in 1948. The dividend is more likely to proceed rising for a few years to come back. That stated, traders must also contemplate the impression of valuation with regards to a inventory’s whole returns.

In whole, Real Components is anticipated to ship an annual whole return of 8.9% by means of 2030.

Closing Ideas

Real Components has a protracted historical past of regular progress, benefiting from the rising demand for automotive components. The getting old automobile fleet within the U.S. is anticipated to proceed rising transferring ahead. Within the meantime, shareholders ought to obtain annual dividend will increase as has been the case for practically seven a long time.

We discover the inventory to be barely overvalued right now, that means that now is probably not the best time to purchase Real Components. Whereas the dividend yield stays stable and the corporate has a protracted historical past of dividend progress, we fee shares of Real Components as a maintain because of projected returns.