Shares of automotive and industrials parts maker Genuine Parts (GPC 0.35%) jumped on Thursday even though it's normally a sleepy stock. The company reported financial results for the first quarter of 2024 and raised its full-year profit guidance, which is why Genuine Parts stock was up 12% as of 11 a.m. ET.
Investor confidence is on the rise
In Q1, Genuine Parts' sales increased by less than 1% to $5.8 billion and its earnings per share (EPS) plunged by 17% to $1.78. Some investors might be surprised that these numbers were met with such enthusiasm today. But there's a good explanation.
With a company as mature as Genuine Parts, nobody expects torrid top-line growth. But investors do monitor profits and the company delivered higher profits than expected in Q1. Because of this, management raised full-year profit guidance.
For 2024, Genuine Parts had expected EPS of $8.95 to $9.15. Now it expects EPS of $9.05 to $9.20. This small boost in profit guidance boosted investor confidence. For context, Genuine Parts stock had been trading near a multiyear low valuation because investors were worried.
GPC PE Ratio data by YCharts
This incredible dividend is still very safe
Genuine Parts has paid and increased its dividend for 67 straight years now. That makes it a Dividend King and its reliability as an income investment is something investors have come to appreciate. The company pays out less than half of its earnings as dividends right now, giving assurance that the dividend is still quite safe and there's room for future increases.
With Genuine Parts doing better than expected right now, that only further bolsters expectations that this will remain a top dividend stock for the foreseeable future.
