A Discounted Dividend Aristocrat You Need To Know

Have you ever wondered why some people seem to get really wealthy, wealthy enough that they never have to worry about money, from their stock market investments?

While others never seem to get traction in building wealth in their stock market portfolio?  These folks remain on a continuous treadmill of making a little money, then losing a little (or sometimes a lot) but really never growing the money tree they so desperately desire.

Just what is the difference between winning and losing long term stock market investor?

Earning a steady income from your stock portfolio is the key to stock market wealth.  This income needs to be consistent, it needs to be reinvested and it needs to be done in a habitual manner.  Any deviation from the formula will greatly delay or even squelch the wealth-building power of the stock market.

wealthy

  • 3 Penny Stocks to Explode in America's Hottest Sector
    As U.S. Defense spending hurtles towards $6.7 TRILLION, one small subset of stocks will soar... For the first time in 18 years, we're on the brink of a situation that could turn every $1,000 into $491,000. It's an historic situation, one that hasn't appeared in nearly two decades. And there are THREE penny stocks that stand to absolutely soar as this situation hits critical mass. Click here to get the ticker symbols.

The official term for this wealth building tactic is dividend reinvestment.

There is one final rule to creating long-term wealth in the stock market from the time proven dividend reinvestment tactic.

dividend poer

This rule is often ignored or forgotten by investors despite its critical nature.

The rule is to be certain to purchase your dividend stocks at a good price.  Many investors simply delve into dividend reinvestment since the stock pays a consistent and growing dividend but don’t pay attention to the stock price itself.

Adding this final rule to the above dividend reinvestment technique can supercharge your wealth building endeavors.

Buying solid and consistent dividend paying stocks at a discount is the final key to a complete wealth  building plan.

We have identified a dividend aristocrat stock that is selling at a deep discount.  Now is the ideal time to start purchasing this dividend creating powerhouse!

Before we delve into this stock, let’s first take a look at exactly what is meant by dividend aristocrats.

Just like the wealthy aristocrats of the world, dividend aristocrats are the crème of the crop when it comes to dividend-paying companies.

aristocrat

Aristocrat is the name given to companies that have increased their dividends for 25 or more straight years.  These are the kings of consistent steady dividends.  They are not the highest yielders, but they are the most consistent and time proven.

When the wealth-building power of a dividend aristocrat is combined with strong but deeply discounted stock, the wealth building energy is magnified.  These are the types of stocks that you need in your portfolio!

The problem is that these stocks are few and far between.  It takes diligence and a keen eye to locate these dividend paying gems.

Today, with the high market volatility, one dividend aristocrat has emerged as an ideal addition to your wealth-building portfolio.

This stock is down 25% from its 52 week high and has increased dividends for an astounding 59 straight years! 

The company is suffering from short-term bearish pressures of a strong greenback leading to several quarters of mixed results.  These mixed results combined with the overall market uncertainty have combined to create an ideal buy opportunity for this dividend aristocrat.

gpc1

The company is Genuine Parts Company (NYSE:GPC).

Genuine best known for the popular NAPA chain of auto parts stores.

It describes itself as a service organization engaged in the distribution of automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials.

napa

The Company operates through four segments: Automotive Parts Group, which distributes automotive parts and accessory items;

Industrial Parts Group, which distributes industrial replacement parts and related supplies;

Office Products Group, which is engaged in the wholesale distribution of a line of office and other business related products, and Electrical/Electronic Materials Group, which distributes materials to more than 20,000 electrical and electronic manufacturers, as well as industrial assembly and specialty wire and cable markets in North America.

In 2014, the Company’s business was conducted from approximately 2,600 locations throughout the United States, Canada, Mexico, Australia and New Zealand.

Founded in 1928, Genuine Parts Company (GPC) offers products and services  through a network of approximately 2,600 operations located throughout the United States, Canada, Mexico, Australia and New Zealand.

2013 was GPC’s 86th year in business and our distribution expertise and well positioned, regionally located distribution centers continue to provide us with the unique ability to adapt our products and services to the ever-changing needs of our customers. GPC’s commitment and reputation for excellent service and quality products position the Company as a critical partner to our customers’ success.

The bullish news is that the company is crushing its competition in the $59 billion do it for me auto part commercial market.  Genuine’s total annual revenue of $15.5 billion is over 50% greater than AutoZone (NYSE:AZO).

In addition, the company beats the competition in sales and net income growth.

This growth is being fueled by acquisitions such as its purchase of Exego Group in 2012.  Exego was Austrailia’s leading auto part supplier and the acquisition opens up markets in Asia and Austrailia that are simply inaccessible to the competition.

At the same time, Exego has already added 50 locations since the Genuine purchase reflecting the rapidly growing value.

What I like best about Genuine is that it is a diversified company.  It not only is a leader in the auto part business it has a large industrial machinery part and electrical supply business.

These diversified businesses enable Genuine to survive and even thrive during downturns in the cyclical auto part business.  This is one advantage that its non-diversified competitors can never duplicate.

In the last reported quarter, the company reported sales increased 1% to $3.94 billion compared to sales of $3.91 billion for the same period in 2014.  Net income for the second quarter was $195.4 million compared to $197.7 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.28, equal to the earnings per share for the second quarter last year.

tom gallagher gpc

Tom Gallagher, Chairman and Chief Executive Officer, commented, “Our results reflect the moderation in our sales and earnings growth rates in the second quarter, primarily due to the ongoing choppiness in the economy.  This is especially the case for our Industrial business.  Overall, our 1% second quarter sales increase included underlying sales growth of 2.2% and a 1.3% contribution from acquisitions, offset by an expected currency headwind of 2.7%.  Sales for the Automotive Group were essentially flat with the prior year and consisted of core automotive growth of approximately 4% offset by the impact of currency.  Sales at Motion Industries, our Industrial Group, decreased by approximately 2%, which basically represents the underlying growth for this business, as a 1% contribution from acquisitions was offset by an equal currency headwind.  Sales at EIS, our Electrical/Electronic Group, increased by 3.5% and included approximately 6% growth from acquisitions, net of a 2% decrease in core sales and a 0.5% negative impact of copper pricing.  Sales for S. P. Richards, our Office Products Group, were up 14%, consisting of 9% underlying growth and approximately 5% from acquisitions.”

Sales for the six months ended June 30, 2015 were $7.68 billion, up 2% compared to 2014.  Net income for the six months was $356.4 million, basically unchanged from 2014, and earnings per share on a diluted basis were $2.33, up 1% compared to $2.30 in 2014.

Genuine reports third quarter numbers on October 19.  We are expecting solid figures as the economy continues its recovery.

The company makes a compelling buy at the current levels.  Adding this time proven, dividend aristocrat to your portfolio simply makes sense.