GPC Stock Report

2-Year Price History

Ockham's Rating

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GPC Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at GPC through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 0.76x and 0.59x respectively.

Utilizing this range we can see that GPC’s current Price to Sales per share ratio of 0.47x is significantly below its average levels historically. In fact, with a current price of $33.06, GPC is a full 31% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for GPC.

GPC Cash Earnings

As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of GPC, Ockham views their current Cash Earnings as significantly below its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from GPC. For example, GPC's Cash Earnings ratio per share has fluctuated between 11.00 and 14.13 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where GPC is with respect to prior business periods.

So with GPC's current price (latest close of $33.06) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, GPC is 21% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with GPC.

GPC Dividends

A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.

When reviewing dividend yields for GPC, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. GPC’s estimated annual dividend is $1.60 resulting in a current dividend yield of 4.84%. The highest dividend yield from GPC over recent history was 6.42% while the lowest dividend yield was 2.65%. GPC has shown confidence by hiking up the dividend yield to 6.73% above the historical median.