Analyzing LKQ Corporation (LKQ) and Genuine Parts Company (GPC)

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

Institutional & Insider Ownership

92.7% of LKQ Corporation shares are owned by institutional investors. Comparatively, 73.9% of Genuine Parts Company shares are owned by institutional investors. 1.1% of LKQ Corporation shares are owned by company insiders. Comparatively, 3.1% of Genuine Parts Company shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LKQ Corporation $9.01 billion 1.09 $1.06 billion $1.58 20.08
Genuine Parts Company $15.53 billion 0.81 $1.22 billion $4.62 18.42

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

Risk & Volatility

LKQ Corporation has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Genuine Parts Company has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LKQ Corporation 0 0 6 0 3.00
Genuine Parts Company 1 6 1 0 2.00

LKQ Corporation presently has a consensus price target of $39.60, indicating a potential upside of 24.80%. Genuine Parts Company has a consensus price target of $98.88, indicating a potential upside of 16.19%. Given LKQ Corporation’s stronger consensus rating and higher probable upside, research analysts plainly believe LKQ Corporation is more favorable than Genuine Parts Company.

Dividends

Genuine Parts Company 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 Company pays out 58.4% of its earnings in the form of a dividend. LKQ Corporation has raised its dividend for 60 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
LKQ Corporation 5.21% 16.54% 6.95%
Genuine Parts Company 4.44% 21.17% 7.79%

Summary

LKQ Corporation beats Genuine Parts Company on 9 of the 17 factors compared between the two stocks.

About LKQ Corporation

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.

About Genuine Parts Company

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.

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