"The earnings payout ratio tells the uncomfortable story. GPC earned $5.81 per share over the trailing twelve months while paying out $4.09 in dividends. That's a 70.4% payout ratio, which sounds manageable until you look at the trend. In fiscal 2024, net income collapsed 31.3% year-over-year to $904 million while the dividend kept climbing. The company is now paying out essentially 100% of annual net income to shareholders."
"Operating cash flow of $1.25 billion in 2024 covered the $555 million dividend payout by 2.25x. But after capital expenditures of $567 million, only $129 million remained. That's a razor-thin cushion compared to $396 million the prior year. The balance sheet has deteriorated materially. Total debt has surged 31% over two years to $6.4 billion, while cash has plummeted 61% from $1.1 billion to just $431 million."
Genuine Parts Company’s dividend yield is 2.99% with an annual payout of $4.12. Earnings per share over the trailing twelve months were $5.81 while dividends paid were $4.09, producing a 70.4% payout ratio and effectively near 100% of annual net income after a 31.3% net income decline in fiscal 2024 to $904 million. Operating cash flow of $1.25 billion covered the $555 million dividend but after $567 million in capital expenditures only $129 million remained. Total debt rose to $6.4 billion, cash fell to $431 million, and debt-to-equity expanded to 1.34x, while dividend growth slowed to 3%.
Read at 24/7 Wall St.
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