GENUINE PARTS CO. $88 (New York symbol GPC; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 152.3 million; Market cap: $13.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.8%; TSINetwork Rating: Average; www.genpt.com) gets 53% of its sales and 55% of its earnings by selling replacement auto parts: Genuine operates 1,100 outlets under the NAPA banner, and its distribution business serves 4,900 independent stores in North America, Australia and New Zealand.

The company also distributes industrial parts (31% of sales, 29% of earnings), office products (12%, 11%) and electrical equipment (4%, 5%).

As the economy improved after the 2008/09 recession, the company’s sales rose 36.9% from $11.2 billion in 2010 to $15.3 billion in 2014. Overall earnings jumped 49.6%, from $475.5 million to $711.3 million. Per-share profits gained 53.7%, from $3.00 to $4.61, on fewer shares outstanding.

A lower-risk acquisition strategy

The company has spurred its growth by purchasing other auto parts suppliers. It tends to target firms that enhance its current products or increase its geographic reach.

In 2012, Genuine paid $343.0 million for Virginiabased Quaker City Motor Parts, which distributes auto parts to NAPA stores in several mid-Atlantic states.

Also in 2012, the company bought 30% of Exego Group (now called GPC Asia Pacific), for $166.0 million. This business sells auto parts through over 400 stores in Australia and New Zealand. Genuine acquired the remaining 70% of Exego for $590.0 million in 2013. The move helped lower its reliance on North America, where it gets 80% of its sales.

In 2014, Genuine added seven more firms for a total of $260.0 million. And it recently agreed to pay an undisclosed sum for Covs Parts, which distributed auto parts in Western Australia. Covs should add $90 million a year to Genuine’s sales.

Expanding by acquisition adds risk, but small purchases like these tend to be easier to integrate, which lowers the odds of a big writedown.

59 years of dividend hikes

Genuine can easily afford to keep making acquisitions. As of June 30, 2015, its total debt was $850.0 million— or a low 6% of its market cap— and it held cash of $223.8 million. That will also let it continue its share buybacks: it spent $145.2 million on repurchases in the first half of 2015.

Genuine has paid dividends since it became a public company in 1948 and has raised its payout annually for the past 59 years. The current annual rate of $2.46 a share yields 2.8%.

Low fuel prices an overlooked plus

The company’s highly cyclical businesses add risk, but its outlook remains bright. For example, low gas prices are prompting U.S. car owners to drive more, and that should spur demand for replacement parts, like brakes. Genuine will likely earn $4.68 a share in 2015, and the stock trades at a reasonable 18.8 times that forecast.

Genuine Parts is a buy.