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Monthly Stock Special

The $20 Special is *Genuine Parts Company (GPC).... (You must log-in as a subscriber to get this price. The non-subscirber reduced-price is $40.)

Comparison GPC (stock of the month) vs SP500 (by Vanguard SP500 Index Fund) in the last 10 years.

 

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Here is a capsule review of our featured stock, provided by Mario Medina.

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Company Information:

Founded in 1925 and headquartered in Atlanta, Georgia, Genuine Parts Company (GPC) is a consumer service organization engaged in the distribution of automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials. The automotive segment distributes replacement parts for all makes and models of automobiles, trucks and other vehicles. The industrial segment distributes a range of industrial bearings, mechanical and fluid power transmission equipment, including hydraulic and pneumatic products, material handling components and related parts and supplies. The office products segment distributes a range of office products, computer supplies, office furniture, and business electronics. The electrical/electronic materials segment distributes a range of electrical/electronic materials, including insulating and conductive materials for use in electronic and electrical apparatus.

Its current total market capitalization of $13.7 billion makes GPC a large cap stock (large capitalization) and its long history of consistent revenues and earnings growth makes it a strong company. It is considered a solid, well diversified business with durable competitive advantage, that also enjoys a solid corporate culture

According to Yahoo! Finance, consensus estimates call for the company to earn about $4.76 per share this year, up from $4.61 last year, and to go to about $5.18 next year. Genuine Parts Co. has paid dividends to investors since 1948, and has increased its payments for 60 consecutive years, which makes it a dividend aristocrat. During the past five years it has increased its dividends at an average rate of 7.5%, and its quarterly payment of $0.675 currently provides a yield of 2.84%.

To illustrate the value of dividends reinvestment: A hypothetical investment in GPC has grown cumulatively (including dividends reinvested) 5,925.21% during the past forty years. The same investment has grown only 2,223.67% in the same period of time, excluding dividends. GPC still has room for significant dividend growth in the coming years, since the company's Dividend Payout Ratio (DPR), or its dividend payments as a percentage of its earnings, is just 57%. Its average Dividend Payout Ratio (DPR) during the past five years is just 52%. Its Price to Earnings ratio (a measure of valuation) of 20.2 is 49% below its industry average, its Price to Book ratio of 4.3 is 51% below its industry average, its Price to Sales ratio of 0.9 is 59% below its industry average and its Debt to Equity ratio of 0.2 is 71% below its industry average.

Technically (from the chart’s perspective) GPC also looks attractive, trading 13.4% below its all-time high, while it is forming a long price consolidation pattern between $109 and $76 approximately, in which $76 is acting as a technical support level. The index funds Vanguard Mid Cap Index and Vanguard Total Stock Market Index are the biggest shareholders of GPC, holding 2.3% and 2.1% of its shares respectively. The stock is also one of the 63 holdings of the mutual fund managed by Moneypaper Advisors, the MP 63 Fund (DRIPX). GPC’s main competitors are Amazon.com Inc. (AMZN), AutoZone Inc. (AZO) and O’Reilly Automotive Inc. (ORLY). Its dividend re-investment plan charges very low fees for cash investing (8 cents per share), for dividend re-investment (8 cents per share) and for selling (8 cents per share). To illustrate those fees: for example, a $100 investment at GPC’s current price would cost a fee of 9 cents or 0.09% of the investment. With the stock being fundamental and technically attractive, this company is an appropriate holding for investors who have a long-term investment horizon.

 

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Mario Medina Personal and Professional background:

Born in Cuba and graduated in Architecture from the University of Havana, Mario Medina is editor and writer of the weekly online investment newsletter El Boletín, and senior analyst for Julie Stav, Inc. Through seminars and conferences live and online, DVDs, investment e-books, articles in his blog and financial columns (on www.invierteconmario.com, www.comunidadtudinero.com and www.directinvesting.com), videos and Podcasts, Mario teaches people inside and outside the United States. The point that differentiates Mario in his teachings, is the simplicity and softness of the language, teaching beginners, the same way he wanted to be educated when starting in the world of personal finances and investments.

Mario provides investment guidance in financial segments of Hispanic television and radio, and has had his own radio shows on those topics at Univision Radio Network, also participating in Tu Dinero, Julie Stav’s financial shows and Podcast series (www.revolverpodcasts.com and www.juliestav.com)

Analyzing the status of the market and its indexes, examining leading companies, sectors and industries, and evaluating the performance of Julie Stav’s Platinum List of Companies, his popular online Daily Market Report allows thousands of people from across the country to follow the situation of the financial world and get the essential information they need to make the best decisions about their own investments.

Today, Mario provides independent fundamental and technical analysis for the mutual fund MoneyPaper 63 (DRIPX), which is the only fund that focuses solely in companies that offer small investors Dividend Re-investment Plans. He is also a regular contributor to directinvesting.com.

Today, those who read the articles written by Mario Medina, or those who daily follow his Market Report, listen to his segments, watch his videos, or attend his seminars, could not imagine that a little over a decade ago its author knew nothing about investments or the stock market. It has been a long, arduous road for the young man newly arrived to the US with empty pockets, a suitcase full of dreams, and whose first savings came from collecting empty soda cans and recycling scrap yard. After discovering the world of finance through books and radio programs, and after years of study and sacrifice, Mario Medina now advises thousands of Hispanics on how and when to buy or sell in the stock market in order to obtain the best returns and minimize their losses.

What was the secret that allowed Mario to develop those early, small investments? "I think the key is to save and invest on a regular basis, with clearly defined long-term, diversified goals," he says. "To do so, each person must determine his o her risk tolerance level ... I do not feel comfortable risking as much as other people, and in turn many risk more than me. It is essential to know how far one can get without trying to beat the stock market every day.”

Through his regular segments, articles and analysis, Mario wants to offer everyone his successful strategies so that anyone can make the most of their work, their savings and their investments, and realize their dreams of economic prosperity. Mario Medina’s own dream is to help those interested in managing their money by knowing the risks and investing directly in the very best, teaching them the necessary steps to succeed in the stock market and other investments, participating in it directly and without brokers, so they can manage their money more efficiently and get better returns without paying more fees.

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