Buy Genuine Parts, hold on to Snap-On

Article Excerpt

GENUINE PARTS CO. $97 (New York symbol GPC; Income-Growth Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 145.9 million; Market cap: $14.2 billion; Dividend yield: 3.1%; Dividend Sustainability Rating: Above Average; www.genpt.com) sells replacement auto parts through company-owned stores (under the NAPA banner) and independent outlets in North America, Europe, Australia and New Zealand. The company also distributes industrial parts, office products and electrical equipment. Starting with the April 2019 payment, Genuine raised its quarterly dividend by 5.9%, to $0.7625 a share from $0.72. The new annual rate of $3.05 yields 3.1%. In the first half of 2019, the company spent $378.7 million on several acquisitions. Genuine focuses on smaller businesses it can easily absorb into the company’s existing operations. That cuts the risk of using acquisitions to expand. In the three months ended June 30, 2019, Genuine’s revenue rose 2.3%, to a record $4.9 billion from $4.8 billion a year earlier. Earnings, excluding one-time items, fell 1.4%, to $1.57 a share (or a total of…