Group 1 Automotive (GPI) caught investor attention after its board approved a 10% increase in the 2026 annual dividend rate to $2.20 per share, with a $0.55 quarterly payment scheduled for March.

Even with the dividend increase, recent trading has been softer. The 30-day share price return is 16% and the year-to-date share price return is 14.96%, contributing to a 1-year total shareholder return of 30.32%. The 3- and 5-year total shareholder returns of 41.72% and 132.14% indicate that longer term holders have still seen substantial gains.

If this dividend news has you thinking about where else income and growth might come from, it could be worth scanning our 23 top founder-led companies as a starting list of ideas.

With GPI trading at $333.86 and flagged as having a 40% intrinsic discount and a large gap to the US$454.11 analyst target, you have to ask: is this a genuine opportunity, or is the market already baking in future growth?

Most Popular Narrative: 27.2% Undervalued

At $333.86, Group 1 Automotive sits well below the most widely followed fair value estimate of $458.56, which is built using a 12.09% discount rate and detailed long term forecasts.

Strategic dealership acquisitions in fragmented U.S. and U.K. markets and disciplined portfolio management (balancing acquisitions and divestitures) are driving operational scale while preserving capital allocation flexibility, supporting steady top-line growth and enhancing earnings power.

Want to see what kind of revenue pace, margin profile, and future earnings multiple are baked into that $458.56 fair value? The full narrative lays out the growth runway, how profitability is expected to evolve, and what kind of valuation the market would need to accept for those forecasts to add up.

Result: Fair Value of $458.56 (UNDERVALUED)

However, that story can shift quickly if online only competitors gain share faster than expected, or if heavier use of acquisitions starts to weigh on integration and returns.

Build Your Own Group 1 Automotive Narrative

If you see the story differently or simply want to test your own assumptions against the data, you can build a custom view in just a few minutes by starting with Do it your way.

A great starting point for your Group 1 Automotive research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If you are serious about building a stronger portfolio, it makes sense to line up a few more ideas now rather than waiting until the next headline.

• Target potential mispricings with our 53 high quality undervalued stocks, built to surface companies where fundamentals and share prices may be out of sync.
• Strengthen your income stream by reviewing the 13 dividend fortresses, focused on companies pairing higher yields with stability.
• Reduce portfolio stress by scanning the 85 resilient stocks with low risk scores, highlighting businesses that score well on resilience and risk factors.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.