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Sep
12
Tim Lambert
Should You Drive with Genuine Parts in Your Portfolio?
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Genuine Parts Company (NYSE: GPC), an auto parts distribution company, has pretty much been in drive coming out of The Great Recession.  It is up for the last quarter, month, six months, and year of market action (chart below).  For 2014, Genuine Auto Parts is up must over 7 percent.  Now trading around $88.50 a share, Genuine Parts Company was just upgraded from a hold to a buy by BB&T Capital Markets with a target price of $100.00.

Interestingly enough, Genuine Parts Company still have appeal as a value stock.

The price-to-sales ratio is 0.91.  That means that each dollar of sales is valued at almost a 10 percent discount in the stock price.  With the upside projected by the most recent analyst recommendation, that discount is even more appealing.

It is also attractive as growth stock.  That will not be surging growth, however.  But it has a proven track record of steady growth, which there should always be a place for in a portfolio. Earnings per share growth this year is 6.30 percent.   Over the next five years, it is predicted to be 6.30 percent.

There is much to be said for stability and predictability like that in the holdings of any investor, be it an individual or an institution.

The dividend income from Genuine Parts Company is much the same, except for it increases annually based on history.  Genuine Parts Company is a Dividend Aristocrat.  To earn that title, a company must have increased the amount of its dividend annually for at least the past 25 years.  The above-average dividend yield of 2.64 percent makes Genuine Parts even more appealing as an income stock.  Due to the annual increases in the dividend amount, shareholders get a raise each year simply for not selling.

For growth investors, value investors, and income investors, Genuine Parts Company will have a portfolio accelerating over the long term.

 



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