Operating Margin - Genuine Parts Co (NYSE:GPC)

Watchlist Manager

Watchlist

Price: 128.34 USD 1.27%

Market Cap: 17.9B USD

5.9%

Current

Average

3.6%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

5.9%

Operating Profit

1.4B

Revenue

24.1B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		Genuine Parts Co NYSE:GPC	17.9B USD	6%
BE		D'Ieteren Group NV XBRU:DIE	8.5B EUR	5%
US		Pool Corp NASDAQ:POOL	9.4B USD	11%
US		LKQ Corp NASDAQ:LKQ	8.6B USD	9%
ZA	C	CA Sales Holdings Ltd JSE:CAA	7.4B Zac	6%
CN		Wuchan Zhongda Group Co Ltd SSE:600704	29.7B CNY	1%
UK		Inchcape PLC LSE:INCH	2.9B GBP	6%
CN		Zhejiang Orient Financial Holdings Group Co Ltd SSE:600120	23.2B CNY	11%
HK	C	China Tobacco International HK Co Ltd HKEX:6055	24.8B HKD	8%
CN	L	Liaoning Cheng Da Co Ltd SSE:600739	18.8B CNY	-4%
CN	X	Xinhua Winshare Publishing and Media Co Ltd SSE:601811	18.1B CNY	11%

Genuine Parts Co
Glance View

Economic Moat

None

Market Cap

17.9B USD

Industry

Distributors

In the bustling realm of automotive and industrial distribution, Genuine Parts Company (GPC) has etched its name as a titan, steering its legacy of steady growth since its founding in 1928. Born from humble beginnings in Atlanta, Georgia, the company ingeniously capitalized on America's burgeoning demand for auto parts, establishing itself as a key player in the distribution of automotive replacement parts. The company operates a vast network of distribution centers, retail stores, and service outlets primarily under the NAPA Auto Parts brand in North America. By maintaining robust relationships with a wide range of suppliers, GPC ensures a seamless flow of products to its extensive customer base, which includes automotive service professionals and do-it-yourself enthusiasts. The company's revenue model is anchored on the sale of a diverse range of parts, from heavy-duty truck components to specialty items ordered by niche clientele, generating a balanced mix of revenues that insulate it from market fluctuations. Beyond the automotive realm, GPC demonstrates strategic diversification through its industrial parts segment. It operates under the Motion Industries banner, serving a broad portfolio of sectors including agriculture, food and beverage, and energy among others. Motion Industries supplies everything from bearings and electrical power transmission products to safety and material handling solutions. This diversification strategy helps the company mitigate risks associated with relying solely on the automotive segment, enhancing its financial resilience and exploiting opportunities in growing industrial markets. By investing in digital enhancements and focusing on operational efficiencies, Genuine Parts Company effectively marries traditional distribution prowess with modern technological integration, allowing it to thrive in an increasingly competitive marketplace. Their ability to anticipate market needs and manage logistical intricacies enables GPC to not only sustain profitability but also maintain its reputation as a leader in both the automotive and industrial sectors.

View GPC Analysis

GPC Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

US	Johnson & Johnson NYSE:JNJ	Pharmaceuticals
US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
US	Nike Inc NYSE:NKE	Textiles, Apparel & Luxury Goods
US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

	Johnson & Johnson NYSE:JNJ	204.39 USD -0.66%
	Berkshire Hathaway Inc NYSE:BRK.A	748 060 USD -0.3%
	Bank of America Corp NYSE:BAC	55.85 USD -0.59%
	Mastercard Inc NYSE:MA	575.54 USD -0.78%
	UnitedHealth Group Inc NYSE:UNH	343.98 USD -0.83%
	Exxon Mobil Corp NYSE:XOM	124.61 USD 1.38%

	Franklin Covey Co NYSE:FC	18.96 USD 5.86%
	Mohawk Industries Inc NYSE:MHK	118.72 USD 3.9%
	Ardmore Shipping Corp NYSE:ASC	11.68 USD -1.77%
	ASGN Inc NYSE:ASGN	51.21 USD 1.45%
	Skyworks Solutions Inc NASDAQ:SWKS	60.17 USD -0.81%
	Weatherford International PLC NASDAQ:WFRD	89.24 USD 0.03%

	Johnson & Johnson NYSE:JNJ	204.39 USD -0.66%
	Bank of America Corp NYSE:BAC	55.85 USD -0.59%
	Mastercard Inc NYSE:MA	575.54 USD -0.78%
	Salesforce Inc NYSE:CRM	259.94 USD -0.23%
	Abbvie Inc NYSE:ABBV	220.08 USD -1.81%
	Home Depot Inc NYSE:HD	374.64 USD 4.19%

	Monolithic Power Systems Inc NASDAQ:MPWR	958.97 USD -0.01%
	Applovin Corp NASDAQ:APP	647.72 USD 5.06%
	Apple Inc NASDAQ:AAPL	259.37 USD 0.13%
	NVIDIA Corp NASDAQ:NVDA	184.86 USD -0.1%
	Cal-Maine Foods Inc NASDAQ:CALM	73.69 USD -2.35%
	Pro Medicus Ltd ASX:PME	210.21 AUD -2.64%

Genuine Parts Co
NYSE:GPC