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.

November 7, 2011 - Bed Bath & Beyond Inc. (BBBY-NASDAQ), together with its subsidiaries, operates a chain of retail stores. It sells a range of domestic merchandise, such as bed linens and related items, bath items, and kitchen textiles; and home furnishings, including kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and certain juvenile products.

As of August 27, 2011, the company had a total of 1,155 stores, including 986 BBB stores, 70 CTS stores, 54 buybuy BABY stores, and 45 Harmon stores in 50 states, the District of Columbia, Puerto Rico, and Canada. It also operates two stores under the name of Home & More in Mexico City through a joint venture. Bed Bath & Beyond Inc. was founded in 1971 and is based in Union, New Jersey.

There are several things to like about BBBY. Not in any particular order: 1. No debt on the books. Zero. 2. Financial Strength: A++. 3. Increasing earnings for the last 3 years in spite of a very tough retail environment (called a recession). 4. High Return on Equity (22.92%). And those are just the attributes that immediately pop out. On further investigation, the news gets even better.

Let's start with earnings where investors turn their attention most fervently. In 2008, they dropped to $1.64 from $2.10 in '07. But that was in the heart of the economic mess, when everyone was filled with despair and the world seemed to be ending. By '09, earnings repaired and moved ahead to $2.30. Last year, they finished at $3.07 (up 33.4% in tough times). This year, 29 analysts have a consensus opinion that the final tally will show $3.81, then see $4.37 next year.

Third quarter results will be out on December 21 (fiscal year ends February 26). Quarterly earnings are estimated to be 88 cents compared to 74 cents last year in the third. Look for $1.30 in the final quarter compared to $1.12 this year in the fourth. Over the last 5 years, earnings grew by an average of 11.8% (that includes the lack of growth in '08). For the next 5 years, analysts forecast increased EPS by 15% a year, on average.

Digging into second quarter results gives a good picture as to why the numbers keep improving. Same store sales were higher by 6% but comparisons were somewhat easier because last year at this time consumers were still keeping their wallets tightly closed. Foot traffic increased for the quarter. Back to school sales were solid. And analysts forecast a healthy holiday shopping season for BBBY across all its concept stores.

Also helping the final results was lower inventory levels. Costs were down, especially in some commodity prices. Selling, General and Admin expenses have been held even with higher sales. Expect better operating and profit margins going forward as these trends continue.

Management isn't resting. More stores are in blueprints. This year, there will open 40 new ones with emphasis on buybuyBABY units. Analysts believe this concept will continue to grow and be one of the driving forces for better sales.

As mentioned above, there is no debt on the books. The bonus: there's also a lot of cash. $1.74 billion of it. With that much cash, expansion is easy. So is buying back stock. Or making acquisitions which should be plentiful in this difficult retail environment. There's always a chance that a dividend could start.

Essential Numbers:
- Trailing P/E: 17.65
- Forward P/E: 14.18
- Price to sales ratio: 1.63
- Price to book: 3.81
- Operating margin: 15.64%
- Profit margin: 9.67%
- Return on equity: 22.92%
- Revenues (last 12 months) $9.12 billion
- Cash per share: $7.26
- Total debt: 0
- Current ratio: 3.01
- Book value per share: $16.29
- 52 week change: 37.45%
- Total shares Outstanding: 240.07 million
- Float: 232.27 million
- Stock held by insiders: 2.57%
- Held by Institutions: 91.4%
- There is no dividend.

Conservative investors will see lots of numbers that please the eye in BBBY. Management delivered in one of the worst recesssion in decades. The stock reflects that as it has gone mostly higher over the last 3 years. But with solid growth predicted, there seems to be more room for this stock to increase. If you're looking for a retailer to add to your portfolio, shop at the BBBY and discover the value it represents.

- Company Web site: www.bedbathandbeyond.com

Ted Allrich