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 17, 2008 - 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; home furnishings, including kitchen and tabletop items, fine tabletop, basic housewares, and general home furnishings.

It operates stores under different names, including Bed Bath & Beyond (BBB), Christmas Tree Shops (CTS), Harmon and Harmon Face Values(Harmon), and buybuy BABY. As of May 31, 2008, the company operated 890 BBB stores, 41 CTS stores, 40 Harmon stores, and 10 buybuyBABY stores in the United States, the District of Columbia, Puerto Rico, and Canada. The company was founded in 1971 and is based in Union, New Jersey.

Best Buy is having a rough go of it. All retailers are. And with holiday shopping predicted to be a disaster, there's no relief in sight. But if investors look beyond the current malaise, to a more normal economy, then spending time to investigate BBBY makes sense.

The bad news: Profits were down in the second quarter (ended August 30) for the third straight quarter, as were most retailers thanks to a slowing economy and poor housing conditions. Analysts don't see much changing for the next quarter. Earnings for the year will be down from last year, with estimates of $1.74, compared to $2.10 in 2007. Next year, analysts predict $1.90.

Quarterly earnings will be out on January 7, 2009. Look for 40 cents a share versus 52 cents a share last year in the same quarter. For the last fiscal quarter in February, expect 58 cents compared to 66 cents last year in the same period.

The good news: Expansion continues with 13 new Bed Bath & Beyond stores opened during the second quarter. Management announced that a total of 50 stores will be open by the end of this fiscal year (Feb of '09) in the U.S. and Canada. That's an expansion of about 6%. In total, over the next several years, management expects 400 new stores.

For the Christmas Tree Shop division, there are 12 new stores planned and may be accelerated in opening thanks to good demand. The other group, buybuyBaby, recently acquired, should also see expansion as it currently has only 10 stores in the Northeast.

The big unknown with BBBY (as with all retailers) is how long this slump will last. Those earnings projections can only go lower if things worsen. That means the stock price will as well, even though the forward P/E is only 11 on a stock that showed an average annual P/E over the last 10 years that ranged between 16.5 and 40. By that valuaton metric, the stock looks very attractive.

One positive note: competition is less. Linens 'n Things is out of business. That should extend BBBY's market share even further, and it's already the number 1 home improvement store. Also, the company carries an A++ financial strength rating from Value Line so it can weather the current economic storm better than most.

More numbers: Zero is the amount of debt on the books. Cash is $296 million. Market Cap is $5.42 billion with 259.7 million shares outstanding and a float of 246.48 million shares. Price to Sales is .74. Price to Book is 1.94. Profit margin in the last 12 months was 7.02% and Operating margin was 10.63% in the same time period. Return on Equity was 19.59 for the last year. For most of the decade the ROE has been between 20% and 25.3%. Current ratio is 2.19. Book value is $10.62.

If you are the type of investor who can look beyond the current crisis, then you'll want to dig deeper into Bed Bath & Beyond. It's expanding in a slow market, has a stellar Return on Equity, and no debt. When the economy turns, most likely this is a stock that will show a quick rebound.

- Company Web site: www.bedbathandbeyond.com

- Ted Allrich