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Group 1 Automotive (GPI) Increases Cash Dividend by 7.7%

Zacks Equity Research

Much to the delight of the shareholders, the board of directors of Group 1 Automotive, Inc. GPI announced a second-quarter 2019 cash dividend payout of 28 cents per share. This marks a 7.7% sequential increase in its dividend payment. The increased dividend will be paid on Sep 17, 2019, to stockholders of record as of Sep 3, 2019.

Houston, TX-based Group 1 Automotive is one of the leading automotive retailers in the world. It is engaged in selling new and used vehicles as well as offers vehicle financing, insurance and service contracts. The company operates through three reportable segments — the United States, the U.K. and Brazil. In order to boost shareholders’ value, it pursues different capital deployment strategies.

In second-quarter 2019, the company had $300 million of cash flow. For the six months ended Jun 30, 2019, it paid out dividends of $9.3 million to shareholders of its common stock.

In the second quarter, Group 1 Automotive reported adjusted earnings per share of $2.83, beating the Zacks Consensus Estimate of $2.74. The bottom line improved from the prior-year quarter’s number of $2.45. Results were aided by a stellar performance in the United States despite softness in sales in the new vehicle market. The company has a well-balanced portfolio in terms of location, business mix and brands. Moreover, its robust balance sheet and streamlined business allow it to put increased focus on shareholder-value enhancing capital allocation strategies.

In the past six months, Group 1 Automotive has outperformed the industry it belongs to. During the same time frame, the company’s shares have gained 22.4% compared with the industry’s growth of 14.2%.

Zacks Rank & Other Key Picks

Currently, Group 1 Automotive sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the auto space are Fox Factory Holding Corp FOXF, CarMax, Inc. KMX and Gentex Corporation GNTX, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fox Factory has an expected long-term growth rate of 16.7%. In the past year, shares of the company have rallied 12.9%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 15.7%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 8.6%.

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