Dividend Aristocrats are companies that have consistently increased their dividends for more than 25 years, making them a reliable and stable source of income for investors. Albemarle (NYSE:ALB) and Genuine Parts (NYSE:GPC) are two such stocks that not only boast an impressive dividend history but also have strong potential for growth.
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Let’s take a closer look at these two Dividend-Aristocrat stocks.
Albemarle Corp.
The lithium mining giant has raised its dividends for 29 consecutive years. Moreover, ALB’s top line has witnessed a compound annual growth rate (CAGR) of 32.7% in the last three years. The company has benefited from higher lithium prices, driven by rising demand for the metal. Lithium is a key component used in manufacturing batteries for electric vehicles, so Albemarle’s prospects look bright in the long term.
The company is taking steps to increase its lithium production capacity in order to keep up with the rising demand. To achieve this goal, ALB announced in September that it plans to acquire Liontown Resources, a move that will help the company expand its presence in Australia.
Wells Fargo analyst Michael Sison believes that the company is poised for strong volume growth in the coming years. However, he has reduced the price target to $210 from $260, along with earnings estimates for Q4 2023 and 2024. This is due to lower near-term lithium prices, which are expected to impact the company’s variable index contracts.
Is ALB a Good Stock to Buy?
Albemarle stock has a Moderate Buy consensus rating based on 13 Buys, three Holds, and one Sell. Moreover, the average ALB stock price target of $257 implies an impressive 56% upside potential from current levels. The stock has been down 22.7% so far in 2023.
Genuine Parts Company
GPC is engaged in the distribution of automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials. It boasts a stellar dividend growth history of 67 consecutive years and is also a part of the Dividend Kings list. Furthermore, the company’s revenue has grown at a CAGR of 18.7%.
Genuine Parts benefitted from strong used car demand driven by the automotive semiconductor shortage, resulting in low new vehicle inventories. As used cars often require more maintenance and parts replacements, Genuine Parts saw an increase in business.
Additionally, Genuine Parts has been expanding through acquisitions. It acquired Alliance Automotive Group in 2023 and Lausan Group in 2022. As a result, the company has forecasted a 4-6% revenue growth for 2023.
Last week, Truist Financial analyst Scot Ciccarelli reiterated a Buy rating on the stock. The analyst believes that consumer spending trends have slightly weakened in the past few weeks. However, trends for Genuine Parts appear to be steadier compared to the underperformance witnessed by several retailers.
Is GPC a Good Stock to Buy?
On TipRanks, Genuine Parts has a Moderate Buy consensus rating based on three Buys and four Hold ratings. Also, the average Genuine Parts stock prediction of $173.43 implies 18.2% upside potential from current levels. GPC stock has lost 12% so far in 2023.
Key Takeaway
Both Albemarle and Genuine Parts boast resilient business models and solid growth histories. There is potential for further growth in these companies in the future, making ALB and GPC attractive investment opportunities for those seeking consistent dividend income.
