Given the rising prices of new cars amid the global semiconductor chip shortage, people are opting to repair their existing vehicles or buy used cars. Consequently, the aftermarket auto parts industry is seeing solid demand. Thus, we think auto parts O’Reilly (ORLY) and AutoZone (NYSE:) should benefit. But let’s find out which of these stocks is a better buy now. Read on.O’Reilly Automotive, Inc. (NASDAQ:) in Springfield, Mo., and AutoZone, Inc. (AZO) in Memphis, Tenn., are two popular players in the Auto Parts industry. ORLY is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories. The company sells new and remanufactured automotive hard parts, maintenance items, and other accessories to do-it-yourself (DIY) and professional service providers. AZO is a specialty retailer and distributor of automotive replacement parts and accessories. Its stores offer product lines for cars, sport utility vehicles, vans, and light trucks.
As the global semiconductor chip shortage forces companies to delay their new-vehicle production, prices of new cars are on the rise. Given this backdrop, people are either buying used vehicles or repairing their existing vehicles and the aftermarket auto parts industry is witnessing solid demand. According to a Reportlinker.com report, the global automotive aftermarket industry is expected to grow at a 3.6% CAGR to $562 Billion by 2027. Thus, both ORLY and AZO should benefit from the industry tailwinds.
While AZO gained 5.8% over the past three months, ORLY surged 13.3%. In terms of the past six months’ performance, ORLY is a clear winner with 30.3% gains versus AZO’s 29.2% returns. But, which of these stocks is a better pick now? Let’s find out.
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