Earlier this week AutoZone (AZO), the largest U.S. auto-parts retail chain beat analyst estimates with a 16.7% increase in net income to $202.7 million for the third quarter ended May 8. The company said the sector was expected to continue to benefit from increased consumer expenditure on replacement parts as consumers seek to better maintain their older vehicles rather than purchase new vehicles.
Conservative income-seeking investors looking to benefit from this trend then a stock to consider is Genuine Parts Co (GPC), at present the best dividend paying stock in the retail sector with a dividend yield of 4.04%.
Founded in 1928, Genuine Parts Company (GPC) is engaged in the distribution of automotive replacement parts, industrial replacement parts, office products and electronic materials. Their products are offered though a network of over 2000 operations, geographically located across the United States, Canada and Mexico.
It’s largest division is the Automotive Parts Group, which distributes over 38,0000 products through it's 58 NAPA distribution centers located across the United States.
In April the company reported sales totaling $2.6 billion for the first quarter of the year, up 6% on the first quarter of 2009. Net income jumped 13% for the quarter to $100.6 million compared to $89.2 million previously, while earnings per share on a diluted basis came in at 63 cents, up 13% compared to 56 cents for the first quarter last year.
Genuine Parts Company (GPC) has a fantastic dividend paying history. The company has paid a dividend every year since going public in 1948 and the dividend paid on 1 April 2010 represented the 54th consecutive increase in the company's history.
In the year 2009 the company reported record cash flows from operations of more than $845 million. This provides ample dividend cover.
Commenting on the recent results, Tom Gallagher, the Chairman, President and Chief Executive was upbeat on prospects for the group saying: ""We observed some early signs of improving market conditions in the latter part of 2009 and we feel this bodes well for a stronger performance in 2010. We are fortunate to operate in four good industries."
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