Head to Head Review: Genuine Parts (NYSE:GPC) and LKQ (NASDAQ:LKQ)

Genuine Parts (NYSE:GPC) and LKQ (NASDAQ:LKQ) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for Genuine Parts and LKQ, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genuine Parts	0	5	4	1	2.60
LKQ	2	2	5	0	2.33

Genuine Parts presently has a consensus price target of $145.00, indicating a potential upside of 16.37%. LKQ has a consensus price target of $26.07, indicating a potential upside of 29.13%. Given LKQ’s higher possible upside, analysts plainly believe LKQ is more favorable than Genuine Parts.

Risk and Volatility

Genuine Parts has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, LKQ has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Genuine Parts	0.12%	23.00%	4.95%
LKQ	1.89%	9.57%	4.11%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Genuine Parts	$24.30 billion	0.71	$65.94 million	$0.25	498.39
LKQ	$13.65 billion	0.37	$607.00 million	$1.00	20.19

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

Insider & Institutional Ownership

78.8% of Genuine Parts shares are held by institutional investors. Comparatively, 95.6% of LKQ shares are held by institutional investors. 0.1% of Genuine Parts shares are held by company insiders. Comparatively, 0.4% of LKQ shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Genuine Parts pays an annual dividend of $4.25 per share and has a dividend yield of 3.4%. LKQ pays an annual dividend of $1.20 per share and has a dividend yield of 5.9%. Genuine Parts pays out 1,700.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. LKQ pays out 120.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Genuine Parts has raised its dividend for 70 consecutive years and LKQ has raised its dividend for 3 consecutive years. LKQ is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

LKQ beats Genuine Parts on 10 of the 18 factors compared between the two stocks.

About Genuine Parts

Genuine Parts Company is a distributor of automotive replacement parts and industrial products. Founded in 1928 and headquartered in Atlanta, Georgia, the company serves businesses and consumers through its distribution networks and brands. Its automotive business distributes replacement parts, accessories and related products, including through the NAPA Auto Parts brand. Its industrial business, operating primarily as Motion, supplies products such as bearings, power-transmission components, fluid-power equipment and other maintenance and repair items to industrial customers.

About LKQ

LKQ Corporation (NASDAQ: LKQ) distributes replacement parts, components and related products for vehicle repair and maintenance. Its offerings include recycled and refurbished parts, aftermarket products and original equipment manufacturer (OEM) parts, serving collision repair shops, mechanical repair businesses and other customers. The company also supplies specialty automotive parts and accessories, including products for vehicle customization and performance. LKQ operates across North America and Europe, as well as in Taiwan.