This Car Parts Retailer is a Strong Candidate for Dividend Investors

Advance Auto Parts stock is up over 16% in the past 12 months

facebook X logo linkedin


Advance Auto Parts, Inc. (NYSE:AAP) stock has gone by way of the broader market, shedding 14.6% this year so far. However, the stock didn't see the same dramatic breakdown as some of its sector peers. And with support emerging at the 320-day moving average, AAP has managed to maintain a year-over-year lead of 16%. A short-term bounce could be on its way, too, as the stock sports a 14-day Relative Strength Index (RSI) of 36, which sits just on the cusp of "oversold" territory.

aap march 11

Short sellers have been targeting AAP, with short interest rising 16.6% in the last reporting period. Should some of these investors begin to change their tune, it could put some wind at the stock's back, as short interest now makes up 5.1% of  the stock's available float, and would take near four days to cover, at its average daily pace of trading. 

A shift in the options pits could also help AAP back up the charts. Of the 14 in coverage, six still say "hold."

From a fundamental point of view, Advance Auto Parts stock also offers a fair valuation, with AAP trading at a forward price-earnings ratio of 16.00 and a price-sales ratio of 1.21.

Furthermore, the car parts company has grown its annual revenues 8.8% since fiscal 2020 and 14.8% since fiscal 2018. AAP has also increased its annual net income 25% since fiscal 2020 and 45.4% since fiscal 2018. On top of that, Advance Auto Parts is estimated to grow its earnings by 13.8% and its revenues by 3.6% for fiscal 2022.

Overall, the biggest concern surrounding Advance Auto Parts stock’s fundamentals can be found on its balance sheet, which holds $601.43 million in cash and $3.84 billion in total debt. Still, AAP presents a decent option for dividend investors, due to the consistency and security the company’s business provides. Advance Auto Parts offers a solid dividend yield of 2.98% with a forward dividend of $6.00.

 

 

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.


Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!