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.

October 13, 2008 - Emerson Electric Co. (EMR-NYSE) is a diversified global technology company, designing and supplying product technology and delivering engineering services to industrial and commercial, and consumer markets worldwide. It operates in five segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Appliance and Tools.

The Industrial Automation segment provides integrated manufacturing solutions to the manufacturers of products, including motors, transmissions, alternators, fluid controls, and materials joining equipment.

The Network Power segment designs, manufactures, installs, and maintains products providing "grid to chip" electric power conditioning, power reliability, and environmental control for telecommunications networks, data centers, and other critical applications. This segment offers power systems, embedded power supplies, precision cooling, and inbound power systems.

The ClimateTechnologies segment provides products and services for areas of the climate control industry, including residential, commercial, and industrial heating and air-conditioning, and commercial refrigeration. Its technology enables homeowners and businesses to manage their heating, air-conditioning, and refrigeration systems; and digitally controls and remotely monitors refrigeration units in grocery stores and other food distribution outlets. The Appliance and Tools segment offers products and solutions in motors, appliances and components, and tools and storage. The company was founded in 1890 and is based in St. Louis, Missouri.

This stock is down 40% from its all-time highs set last year when it traded at $59.10 (prices reflect 2 for 1 split in late 2006). Yet revenues and earnings keep going higher. In the latest quarter (June 30 ending), earnings were up 14% over the same quarter last year. Revenues were up 12% with 7% coming from additional sales and 4% from currency translation and 1% from recent acquisitions. The best performing group was Process Management which saw increased demand from the global energy industry. Emerging markets (30% of sales) helped offset smaller gains in the U.S. and Europe.

Yet the stock is down dramatically from its highs. Most likely investors anticipate even the best companies to feel the economic pinch that has clamped on every economy, advanced or emerging. In particular, one division, the Network Power group, focuses on the telecom industry which in the U.S. and Europe is seeing lower spending budgets. Raw materials cost more as well. Investors are expecting the worst and selling before the results are in.

Management is having none of the pessimism. It recently raised the lower end of its earnings estimates for 2008, understandable when July and August saw order growth at 10%. It also reconfirmed internal growth of 5% to 7% for the next 9 to 12 months using the solid order backlog as reason.

More numbers: Earnings for the September quarter (due out November 4) are projected to be 86 cents a share, up from 78 cents a year ago in the same quarter. For the December quarter, analysts see 75 cents, up from 66 cents last year. For the year, they predict $3.09, well above the $2.66 for 2007, then look for $3.37 in 2009. For the last 5 years, earnings have averaged an increase of 19.54% per year. Analysts project average annual growth of 12.83% over the next 5.

Sales for this year should hit $24.87 billion, up from $22.57 last year. Next year, expect $26.08 billion. Market Cap is $28.28 billion with 775.94 million shares outstanding. Institutions hold 75% of the stock. Price to Sales is 1.05 while Price to Book is 2.66. Debt to Equity is .52 while the Current Ratio (current assets divided by current liabilities) is 1.433. There's a dividend of $1.20 for a yield of 3.60%. It takes 39% of earnings to pay the dividend. Value Line gives the company an A++ for financial strength.

As mentioned above, investors are expecting the worst for EMR even though the company has delivered solid earnings every quarter. Give credit to management, broad product offerings and solid international diversification.

The stock is trading at a very attractive price. Investors with a longer term horizon will find this one worth their time to investigate further.

Company Web site: www.gotoemerson.com

- Ted Allrich