GENUINE PARTS CO. $69 - New York symbol GPC

GENUINE PARTS CO. $69 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 155.1 million; Market cap: $10.7 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.1%; TSINetwork Rating: Average; www.genpt.com) gets 49% of its sales and 50% of its earnings by selling auto parts. The company operates 1,300 of its own outlets under the NAPA banner, and its distribution business serves 4,750 independent stores across North America.

Genuine also distributes industrial parts (34% of sales, 33% of earnings), office furniture (13%, 12%) and electrical equipment (4%, 5%).

The company’s sales rose 4.5% in 2012, to $13.0 billion from $12.5 billion in 2011. Sales of auto parts rose 4%, partly due to an acquisition, while sales at the industrial products division gained 7%. Electrical equipment sales rose 5%. Sales of office products were flat.

Earnings for the year rose 14.7%, to $648.0 million from $565.1 million. Earnings per share gained 15.6%, to $4.14 from $3.58, on fewer shares outstanding.

The company recently amended its pension plan to freeze future benefits. That added $23.5 million to its 2012 earnings. The higher sales and an ongoing cost-control plan also boosted its earnings.

In addition, Genuine raised its quarterly dividend by 8.6%, to $0.5375 a share from $0.495. The new annual rate of $2.15 yields 3.1%. The stock trades at a reasonable 15.9 times the $4.34 a share that Genuine will likely earn this year.

Genuine Parts is a buy.

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