Analyzing Genuine Parts (NYSE:GPC) and DICK’S Sporting Goods (NYSE:DKS)

Genuine Parts (NYSE:GPCGet Free Report) and DICK’S Sporting Goods (NYSE:DKSGet Free Report) are both consumer cyclical companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

Genuine Parts pays an annual dividend of $3.80 per share and has a dividend yield of 2.6%. DICK’S Sporting Goods pays an annual dividend of $4.00 per share and has a dividend yield of 3.6%. Genuine Parts pays out 44.4% of its earnings in the form of a dividend. DICK’S Sporting Goods pays out 35.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Genuine Parts has increased its dividend for 68 consecutive years and DICK’S Sporting Goods has increased its dividend for 9 consecutive years. DICK’S Sporting Goods is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Genuine Parts has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, DICK’S Sporting Goods has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.

Earnings and Valuation

This table compares Genuine Parts and DICK’S Sporting Goods’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genuine Parts $22.88 billion 0.90 $1.18 billion $8.55 17.22
DICK’S Sporting Goods $12.62 billion 0.75 $1.04 billion $11.27 9.82

Genuine Parts has higher revenue and earnings than DICK’S Sporting Goods. DICK’S Sporting Goods is trading at a lower price-to-earnings ratio than Genuine Parts, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Genuine Parts and DICK’S Sporting Goods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genuine Parts 5.30% 32.43% 7.54%
DICK’S Sporting Goods 8.03% 40.52% 11.37%

Insider & Institutional Ownership

77.5% of Genuine Parts shares are owned by institutional investors. Comparatively, 68.2% of DICK’S Sporting Goods shares are owned by institutional investors. 0.4% of Genuine Parts shares are owned by insiders. Comparatively, 30.8% of DICK’S Sporting Goods shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Genuine Parts and DICK’S Sporting Goods, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genuine Parts 0 4 4 0 2.50
DICK’S Sporting Goods 0 12 9 0 2.43

Genuine Parts currently has a consensus target price of $177.00, indicating a potential upside of 20.19%. DICK’S Sporting Goods has a consensus target price of $143.17, indicating a potential upside of 29.43%. Given DICK’S Sporting Goods’ higher possible upside, analysts clearly believe DICK’S Sporting Goods is more favorable than Genuine Parts.

Summary

DICK’S Sporting Goods beats Genuine Parts on 10 of the 17 factors compared between the two stocks.

About Genuine Parts

(Get Free Report)

Genuine Parts Company distributes automotive replacement parts, and industrial parts and materials. It operates through Automotive Parts Group and Industrial Parts Group segments. The company distributes automotive replacement parts for hybrid and electric vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, farm vehicles, small engines, farm equipment, marine equipment, and heavy duty equipment; and accessory and supply items used by various automotive aftermarket customers, such as repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, and individuals. It also distributes industrial replacement parts and related supplies, such as bearings, mechanical and electrical power transmission products, industrial automation and robotics, hoses, hydraulic and pneumatic components, industrial and safety supplies, and material handling products for original equipment manufacturer, as well as maintenance, repair, and operation customers in equipment and machinery, food and beverage, forest product, primary metal, pulp and paper, mining, automotive, oil and gas, petrochemical, pharmaceutical, power generation, alternative energy, government, transportation, ports, and other industries. In addition, the company provides various services and repairs comprising gearbox and fluid power and process pump assembly and repair, hydraulic drive shaft repair, electrical panel assembly and repair, hose and gasket manufacture and assembly. It operates in the United States, Canada, France, the United Kingdom, Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia, New Zealand, Mexico, Indonesia, and Singapore. Genuine Parts Company was incorporated in 1928 and is headquartered in Atlanta, Georgia.

About DICK’S Sporting Goods

(Get Free Report)

DICK'S Sporting Goods, Inc., together with its subsidiaries, operates as a sporting goods retailer primarily in the United States. The company provides hardlines, includes sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products; apparel; and footwear and accessories. It also owns and operates Sporting Goods, Golf Galaxy, Field & Stream, Public Lands, Going Going Gone!, and other specialty concept stores; and DICK'S House of Sports and Golf Galaxy Performance Center, as well as GameChanger, a youth sports mobile application for video streaming, scorekeeping, scheduling, and communications. The company sells its product through e-commerce websites and mobile applications. The company was formerly known as Dick'S Clothing and Sporting Goods, Inc. and changed its name to DICK'S Sporting Goods, Inc. in April 1999. DICK'S Sporting Goods, Inc. was incorporated in 1948 and is headquartered in Coraopolis, Pennsylvania.

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