Genuine Parts distributes automotive replacement parts, industrial replacement parts, business products and electrical and electronic components in North America.  The company has grown profits and dividends at a 5% annual rate over the last 10 years, earning a 15%+ return on equity.  The economic softness has been a problem for GPS as it has for most companies; however, GPC should increase both its dividend and earnings growth rate as a result of:

(1) product line expansion,

(2) penetration of new markets,

(3) aggressive cost cutting,

(4) gradual price increases,

(5) improving growth in the auto parts segment as the average age of vehicles on the road has risen to almost 10 years.

Genuine Parts is rated A+ by Value Line, has a 17% debt to equity ratio, has an active ongoing stock repurchase program and its stock yields 4.4%.

Statistical Summary

                 Stock      Dividend         Payout      # Increases   
                 Yield      Growth Rate     Ratio       Since 1999
 
GPC          4.4%           5%              65%             10
Ind Ave      1.9             3                36               NA  

                Debt/                        EPS Down       Net        Value Line
                 Equity         ROE      Since 1999      Margin       Rating

GPC         17%            16%            3                 8%          A+
Ind Ave     32               7              NA                2             NA

      Chart

Note: GPC has traded out of the up trend off its March low and above the down trend line off its September 2008 high (red line).  It briefly challenged its November 2008 trading high (green line) but couldn’t hold above it. The blue line is the lower boundary of an up trend dating back to 1975.  The wiggly blue line is on balance volume.


 

http://finance.yahoo.com/q?s=GPC
11/09

    News on Stocks in Our Portfolios

    Emerson Electric (Dividend Growth and High Yield Portfolios) reported third quarter earnings per share of $.67 versus expectations of $.60 and $.88 recorded in the prior year’s third quarter.

    Marathon Oil (Dividend Growth Portfolio) reported third quarter earnings per share of $.58 versus estimates of $.57 and $2.90 reported in its 2008 third quarter.

    Mastercard (Aggressive Growth Portfolio) reported third quarter earnings per share of $3.45 versus forecasts of $2.94 and $1.48 recorded in the third quarter of 2008.