LKQ Corporation (LKQ) and Genuine Parts (GPC) Critical Survey

Genuine Parts (NYSE: GPC) and LKQ Corporation (NASDAQ:LKQ) are both large-cap auto/tires/trucks companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, profitabiliy, dividends and risk.

Analyst Ratings

This is a summary of current ratings for Genuine Parts and LKQ Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genuine Parts 1 5 1 0 2.00
LKQ Corporation 0 1 6 0 2.86

Genuine Parts currently has a consensus price target of $96.86, suggesting a potential upside of 16.07%. LKQ Corporation has a consensus price target of $39.20, suggesting a potential upside of 14.19%. Given Genuine Parts’ higher possible upside, equities research analysts plainly believe Genuine Parts is more favorable than LKQ Corporation.

Institutional & Insider Ownership

73.3% of Genuine Parts shares are held by institutional investors. Comparatively, 91.8% of LKQ Corporation shares are held by institutional investors. 3.1% of Genuine Parts shares are held by insiders. Comparatively, 1.1% of LKQ Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Genuine Parts has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, LKQ Corporation has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Dividends

Genuine Parts pays an annual dividend of $2.70 per share and has a dividend yield of 3.2%. LKQ Corporation does not pay a dividend. Genuine Parts pays out 58.3% of its earnings in the form of a dividend. Genuine Parts has raised its dividend for 60 consecutive years.

Valuation & Earnings

This table compares Genuine Parts and LKQ Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Genuine Parts $15.73 billion 0.78 $1.22 billion $4.63 18.02
LKQ Corporation $9.16 billion 1.16 $1.06 billion $1.61 21.32

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

Profitability

This table compares Genuine Parts and LKQ Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genuine Parts 4.37% 21.05% 7.60%
LKQ Corporation 5.31% 15.74% 6.82%

Summary

Genuine Parts beats LKQ Corporation on 10 of the 17 factors compared between the two stocks.

Genuine Parts Company Profile

Genuine Parts Company is a service organization engaged in the distribution of automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials. The Company’s segments include Automotive, Industrial, Office Products Group, Electrical/Electronic Materials and Other. The automotive segment distributes replacement parts for all makes and models of automobiles, trucks and other vehicles. The industrial segment distributes a range of industrial bearings, mechanical and fluid power transmission equipment, including hydraulic and pneumatic products, material handling components and related parts and supplies. The office products segment distributes a range of office products, computer supplies, office furniture, and business electronics. The electrical/electronic materials segment distributes a range of electrical/electronic materials, including insulating and conductive materials for use in electronic and electrical apparatus.

LKQ Corporation Company Profile

LKQ Corporation (LKQ) is a distributor of vehicle products, including replacement parts, components and systems used in the repair and maintenance of vehicles, as well as specialty vehicle products and accessories, and automotive glass products. The Company’s segments include Wholesale-North America; Europe; Specialty, and Self Service. It offers its customers a range of replacement systems, components, equipment and parts to repair and accessorize automobiles, trucks, and recreational and performance vehicles. It distributes a range of products to collision and mechanical repair shops, including aftermarket collision and mechanical products, recycled collision and mechanical products, refurbished collision products, such as wheels, bumper covers and lights, and re-manufactured engines. It also has operations in North America, Europe and Taiwan. It is a provider of alternative vehicle collision replacement products and alternative vehicle mechanical replacement products.

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