GENUINE PARTS CO. $87 - New York symbol GPC

GENUINE PARTS CO. $87 (New York symbol GPC; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 153.6 million; Marketcap: $13.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.6%; TSINetwork Rating: Average; www.genpt.com) has agreed to pay an undisclosed sum for Toledo, Ohio-based Impact Products. This privately held firm sells janitorial equipment, such as mops, pails, safety glasses and first aid kits, to businesses.

Expanding by acquisition adds risk, but the purchase looks like a good fit with Genuine’s office supplies and furniture business. The new operations will also add $85 million to Genuine’s $14.1 billion of annual sales. Moreover, small purchases like this tend to be easier to integrate.

The stock now trades at 19.0 times the company’s projected 2014 earnings of $4.58 a share. That’s a high p/e for a firm that supplies clients in cyclical industries like auto parts and manufacturing.

Genuine Parts is a hold.

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