Same business, so I thought I post this.


DESPITE FALLING PROFITS, auto-parts middleman Genuine Parts' (ticker: GPC) share

price hasn't been idling in neutral.

It's actually been coasting along nicely, climbing 48% from an eight-year low in

early March.

Still, Genuine Parts' shares have lagged gains by major stock indexes. Sales from

the auto-parts division and its other businesses have been hobbled by the

recession. And some worry that dealer incentives and the government's "cash for

clunkers" program will further hurt demand for brake pads and other replacement

auto parts.

Yet with profits increasing next year and a generous 4.4% dividend yield, Genuine

Parts could deliver 18% to 25% returns by the end of 2010.

"You buy this stock to sleep at night," says Michael Ward, an analyst with Soleil

Securities. "It's a solid, well-managed company. They raise the dividend annually.

They are restructuring, and if the economy rebounds, they are recovering."

After falling 9% this year, the Street sees revenues rising in 2010 to $10.1

billion. Profits should rise 7% to $2.57 a share.

Genuine Parts, meanwhile, has paid $110 million so far this year on four

acquisitions. In January, the company hiked its dividend for the 53rd consecutive

year to $1.60 a share.

Meanwhile, it expects to have $200 million in free cash flow left over after this

year's $252 million dividend payout.

"The dividend yield offers protection, while the cash flow and balance sheet give

investors a level of comfort that the company will remain aggressive about

acquisitions, share repurchases and raising the dividend," Chief Financial Officer

Jerry Nix tells Barrons.com.

Or as Brian Sponheimer, an analyst with Gabelli & Co., says, "You're buying a cash

flow machine."

Founded in 1928, Genuine Parts is a major player in the $90 billion "aftermarket"

automobile-parts industry, which supplies parts for repairs performed outside the

service department at a car dealership.

The company also owns 1,100 NAPA Auto Parts Stores, which generated sales of

roughly $1.7 billion last year. Another $3.7 billion came from distributing auto

parts to 4,600 independently owned NAPA stores, mechanics, car dealerships, and

companies with fleets of vehicles.

But with revenues of $11 billion in 2008, Genuine Parts doesn't just sell car

parts.