Replacement Parts

Why Real Components Raced 23% Larger in 2022

What occurred

Shares of Real Components (GPC 0.36%) gained 23.8% in 2022, in accordance with knowledge from S&P International Market Intelligence, because the auto trade continued to undergo from the worldwide semiconductor scarcity and provide chain points.

As each new and used automobiles had been more durable to search out, which triggered costs to soar to report ranges, customers dedicated to conserving their present automobiles on the street longer, driving demand for aftermarket auto elements.

Person jumpstarting a car.

Picture supply: Getty Photographs.

So what

Real Components is the proprietor of the 9,600 retail shops that primarily function below the NAPA Auto Components banner. It additionally runs an industrial substitute elements and provides enterprise serving greater than 107,000 prospects all over the world.

The auto market took it on the chin final yr with whole full-year gross sales falling 7.8% to 13.9 million models. Truck and SUV gross sales had been down 6.4% whereas passenger vehicles tumbled 12.8%. 

The common price of a brand new automobile ended 2022 at $46,382, a brand new report excessive and a pair of.5% above the year-ago determine. The value tag for the common used automobile was $27,500 in December, 35% greater than final yr, however down from its peak. Used automobile stock was down 15% from the year-ago interval.

Amid rampant inflation, rising rates of interest, and elevated fuel costs in 2022, prospects opted to maintain their outdated vehicles in working order in the interim.

Now what

That was mirrored in Real Components’ monetary statements, which noticed web gross sales hit a report $16.6 billion over the primary three quarters of the yr, an 18% enhance from the identical level one yr in the past, whereas earnings hit $6.53 per share, a 47% achieve.

But as robust as Real Components’ auto elements enterprise was, it noticed even stronger progress in its industrial elements enterprise, which was up 35% yr to this point. The phase noticed its sixth consecutive quarter of double-digit comparable gross sales progress. 

One of many extra enticing facets of an funding within the aftermarket auto elements retailer is its dividend, which at present yields 2.1% yearly. It has made a dividend cost to shareholders for over 100 years and has elevated the payout yearly since 1948. 

That 74-year report is without doubt one of the better of any inventory available on the market, and qualifies the corporate as a Dividend King, or an organization that has elevated its dividend for 50 years or extra.

Wealthy Duprey has positions in Real Components. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.

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