Here's How Much a $1000 Investment in Genuine Parts Made 10 Years Ago Would Be Worth Today
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Genuine Parts (GPC) ten years ago? It may not have been easy to hold on to GPC for all that time, but if you did, how much would your investment be worth today?
Genuine Parts' Business In-Depth
With that in mind, let's take a look at Genuine Parts' main business drivers.
Atlanta-based Genuine Parts distributes automotive and industrial replacement parts and materials. As of Dec 31, 2021, the company had a network of more than 10,000 locations across 15 countries and network of more than 10,000 locations in 15 countries and employed approximately 52,000 people worldwide.
Currently, Genuine Parts operates through two segments: Automotive Parts and Industrial Parts.
Automotive Parts Group contributed 66% of net sales in 2021. The segment’s distribution centers provide replacement parts accessories and service items throughout North America, Europe and Australasia. In North America, more than 650,000 parts are sold primarily under the National Automotive Parts Association (NAPA) brand name. GPC Asia Pacific serves the Australasian markets primarily under the Repco and NAPA brand names. In Europe, Genuine Parts is rolling out the NAPA brand of quality products and serves each country under a variety of banners. Genuine Parts both the Retail (DIY) and Commercial (DIFM) automotive aftermarket segments with products and services for substantially all domestic and foreign motor vehicle models.
The Automotive Parts group comprises National Automotive Parts Association (“NAPA”) automotive parts distribution centers and stores. In 2021, the company operated 52 NAPA automotive parts distribution centers in the United States and 5.898 domestic company-owned NAPA auto parts stores. The segment also operates Alliance Automotive Group (“AAG”), a European distributor of vehicle parts, tools and workshop equipment. In France, AAG operates 17 distribution centers and serves 1,078 stores, while in the United Kingdom, it has 34 distribution centers and serves 819 stores. In Germany and Poland, AAG operates 59 company stores and serves 178 affiliated outlets, respectively. Lastly, in the Netherlands and Belgium, AAG operates 189 stores.
Industrial Parts Group, operates as Motion Industries, Inc. (“Motion”) and accounted for 34% of net sales in 2021. The segment provides industrial replacement parts and related supplies such as bearings, mechanical and electrical power transmission products, industrial automation, hose, hydraulic and pneumatic components, industrial and safety supplies, and material handling products.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Genuine Parts a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in November 2012 would be worth $3,003.31, or a gain of 200.33%, as of November 16, 2022, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 194.96% and the price of gold increased -0.23% over the same time frame in comparison.
Analysts are forecasting more upside for GPC too.
Genuine Parts’ strategic buyouts to improve product offerings and expand geographical footprint are boosting its prospects. The KDG acquisition has strengthened Genuine Parts’ market-leading position of North American industrial platform. The company's dividend aristocrat status is commendable. The upbeat 2022 view further sparks optimism. Genuine Parts projects 2022 revenues from Automotive and Industrial segments to increase 7-8%% and 31-32%, respectively. However, the company is bearing the brunt of increasing operating expenses since the past several quarters and the trend is likely to continue. Further, Genuine Parts is battling supply chain disruptions, and high freight and commodity costs. Rising capex and elevated leverage are other headwinds. Thus, the stock warrants a cautious stance for the time being.
Shares have gained 12.95% over the past four weeks and there have been 7 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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