There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

December 9, 2008 - Baxter International, Inc. (BAX) operates as a healthcare company worldwide. It offers medical devices, pharmaceuticals, and biotechnology products for the treatment of hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. The company operates through three segments: BioScience, Medication Delivery, and Renal.

The Medication Delivery segment manufactures intravenous (IV) solutions and administration sets, premixed drugs and drug-reconstitution systems, pre-filled vials and syringes for injectable drugs, IV nutrition products, infusion pumps, and inhalation anesthetics, as well as products and services related to drug formulation and packaging technologies.

The Renal segment provides products to treat end-stage renal disease, or irreversible kidney failure. It also manufactures solutions and other products for peritoneal dialysis (PD), a home-based therapy; and distributes products for hemodialysis (HD), which is conducted in a hospital or clinic. It markets its products through independent distributors, drug wholesalers, specialty pharmacy, and homecare companies to hospitals, kidney dialysis centers, nursing homes, rehabilitation centers,doctors' offices, clinical and medical research laboratories, and by patients at home under physician supervision. The company has a collaboration agreement with HHD, LLC, DEKA Products Limited Partnership, and DEKA Research and Development Corp. to develop a home HD machine. Baxter International was founded in 1931 and is based in Deerfield, Illinois.

There are several good reasons conservative investors should find this stock of interest. First, it has an A+ rating for financial strength from Value Line. Second, it has a strong pipeline of drugs that should keep earnings growing for quite some time. And, as with most good, conservative stocks, earnings continue to head higher.

For the last 5 years, average annual growth in earnings was 15.74%. Analysts predict it will be 12.43% over the next 5. Down a little but still relatively strong when compred to most other companies. This year, the average estimate for earnings of 9 analysts is $3.36, up from $2.79 last year. For next year, the average is $3.76. Look for fourth quarter earnings to be released on January 22, 2009 with expectations of 89 cents a share, up from 76 cents a share in the same quarter last year. The first quarter of '09 should show 83 cents vs. 74 in the first quarter of 2008.

Sales are moving ahead as well with this year's total estimated at $12.4 billion compared with last year's $11.26 billion. Next year, analysts predict $12.77 billion.

Revenues are ramping in the BioScience group, up by 23% in the September quarter, thanks to recombinant and plasma products. Also, the company's ADVATE hemophilia treatment and GAMMAGARD immunodeficiency therapy have been selling well, particularly internationally.

New trials are underway for extensions of GAMMAGARD IVIG which should help earnings beginning in 2010. The big advantage of this product: patients can have one dose a month at home subcutaneously rather than visiting a doctor's office. Another possible application for GAMMAGARD is treatment of progressive limb weakness, medically known as multifocal motor neurotherapy. This investigation is in Phase III. Other new products coming soon: an antimicrobial surgical sponge and hard and soft tissue repair products using TISSEEL fibrin sealant.

Management recently announced an almost 20% increase in the dividend, to 26 cents a share per quarter ($1.04 a year for a yield of 1.9%) an indication it feels secure in continued earnings growth. Currently the dividend takes about 28% of earnings to pay so investors can count on getting their quarterly check.

More numbers: P/E is 17.8 with a forward P/E of 14. Price to sales ratio is 2.7, and Price to book is 4.7. Operating margin is 20.53% with a Profit margin of 15.73%. Cash in the bank is $2.2 billion, making for $3.51 a share in cash. Total debt is $3.42 billion which puts the Total Debt to Equity .484. Current ratio is 2.24. Book Value per share is $11.33. There are 622.83 million shares outstanding and a float of 620.18 million. Institutions own 84.7% of the stock.

Baxter has most of the elements of a solid stock: good earnings growth, new products, a stock price chart that is slowly but surely increasing every year, and decent dividend. Conservative investors can dig deeper into this one knowing their time is well spent.

Company Web site: www.baxter.com

- Ted Allrich