Best Auto Parts Stocks

Best Auto Parts Stocks

Auto parts stocks have seen tremendous gains thanks to rising car production, even as their industry grapples with changes and challenges. One standout stock in particular that offers potential profits is LKQ stock, since it operates within the more secure aftermarket segment of this industry.

Gentex is another top pick, serving as the primary provider of dimming rearview mirror technology, while Aptiv offers interesting play on driverless cars.

1. AutoZone (AZO)

AutoZone sells replacement parts, tools and accessories to do-it-yourselfers (DIYers). Their stores carry an extensive product selection for cars, SUVs, vans and light trucks including new and remanufactured automotive hard parts; maintenance items; accessories; non-automotive products as well as non-automotive services like ALLDATA diagnostic repair information software platform.

Memphis-based retailer Target Corporation has an outstanding track record of growth and profitability. Both earnings and sales have consistently outshone estimates this year despite pandemic resurgence, rising interest rates, high inflation rates, and other challenges.

Quality stocks often outshone the broader market over extended periods. Two growth companies currently outperforming it include Apple and Facebook – each boasting revenue and earnings growth faster than most of the U.S. markets combined.

2. O’Reilly Automotive (ORLY)

O’Reilly Automotive retails automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. Serving both professional installers as well as retail or do-it-for-yourself (DIFM) customers alike. Offering both brand and own label products; as well as offering new and remanufactured automotive hard parts like alternators, batteries, brake system components, belts chassis parts fuel pumps hoses starters temperature controls engine parts as well as maintenance items like oil antifreeze products appearance products filters fluids fluids lighting products among many more.

O’Reilly stands as an exemplary narrow-moat firm that has successfully capitalized on industry trends to produce superior returns. Redirecting much of their FCF to share repurchases has reduced share counts while producing strong adjusted returns; furthermore, O’Reilly boasts a solid balance sheet and strong track record of dividend increases.

3. Axalta (AXTA)

Paint and coatings company Axalta Coating Systems boasts a strong outlook that should result in increasing cash flows, ultimately pushing its share price higher over time. However, recent gains may already reflect this positive outlook and so it may no longer make financial sense to buy now at current valuations.

Axalta Coating Systems designs, produces, markets and distributes high-performance coating systems worldwide. Their Performance Coatings segment offers liquid and powder coatings solutions for refinish applications while their Mobility Coatings offering provides technology for original equipment manufacturers, multishop operators and independent body shops. In addition, Axalta provides automotive paint and coatings, colour matching tools, business management systems and training services with manufacturing operations located across North America, EMEA countries Asia Pacific and Latin America.

4. Magna International (MGA)

Magna International Inc operates as a mobility technology company. The Company designs, engineers, and manufactures automotive supplies such as body structures and chassis structures; exterior; seating systems; powertrain; active driver assistance systems; electronics mechatronics mirrors roof systems among others. Magna International serves customers globally.

MGA boasts an exceptional dividend payout ratio of 79% – higher than its industry average of 64% and with an extremely low debt-equity ratio of 0.25.

MGA has experienced numerous stock splits throughout its history. Below is a table that displays prices before and after splits occur.

5. Aptiv PLC (APTI)

Average car ages have reached 12.1 years as more consumers opt to keep and maintain their vehicles for an extended period. This should drive additional maintenance and parts sales; more people may also use their cars during recessionary or post-pandemic recovery travel.

Gentex (GNTX), a digital vision and dimmable mirror tech specialist, stands out as one of the premier technology plays. GNTX gives investors exposure to the growing market for Level 1-3 autonomous driving systems.

These auto parts stocks have been ranked using their A+ Investor grades, which provide intuitive AaEUR”F grades for five key investment factors: value, growth, momentum earnings revisions and quality. Our grades provide intuitive grading system allowing investors to use them. Learn more here about using them effectively when investing. Before considering auto part stocks as investments it is important to carefully consider your investment objectives, risk tolerance and long-term goals before selecting an online trading platform with suitable fees assets features to find one best suited to you portfolio.

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