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.

January 26, 2009 - Honeywell International, Inc. (HON-NYSE) operates as a diversified technology and manufacturing company worldwide. The company operates through four segments: Aerospace, Automation and Control Solutions, Specialty Materials, and Transportation Systems.

The Automation and Control Solutions segment offers environmental and combustion controls; sensing controls; security and life safety products and services; process automation products and solutions; and building solutions and services for homes, buildings, and industrial facilities.

The Specialty Materials segment provides resins and chemicals, hydrofluoric acid, fluorocarbons, fluorine specialties, nuclear services, research and fine chemicals, performance chemicals, imaging chemicals, chemical processing sealants, fibers and composites, specialty films, specialty additives, electronic chemicals, catalysts, adsorbents and specialties, and process technology and equipment for the petrochemical and refining industries.

The Transportation Systems segment offers charge-air systems; thermal systems; after market filters, spark plugs, electronic components, and car care products; and brake hard parts and other friction materials for passenger cars and commercial vehicles industry. Honeywell International was founded in1920 and is headquartered in Morristown, New Jersey.

Even with a slowing economy, Honeywell most likely finshed 2008 with an increase in quarterly earnings, up around 7% to 8% over fourth quarter of 2007. Earnings for the quarter and year will be announced on January 30. Analysts believe the quarterly will show 97 cents vs. 91 cents in the same period last year. For the full year, they expect $3.76, up from $3.16 in 2007. For 2009, they predict $3.20, reflecting the impact of a slowing economy. While the last 5 years saw average annual earnings growth of 21%, analysts foresee that slowing to 10% over the next 5 years. If the economy improves, you can be sure that number will as well since Honeywell is involved in many facets.

Part of the improved earnings per share for this year (up 19%), came from the usual source: higher sales and profits. But part of it was the result of a strong stock buyback program. Another part of the growth came from new long-term contracts, new products, and management of a portfolio of companies, selling some and buying others.

To demonstrate management's confidence in earnings, the annual dividend recently was raised 10% to $1.21. As mentioned, it's also using the strong cash flow to buy back stock. Through September 30 of last year, the company purchased 20 million shares (total outstanding shares is 726.29 million). Analysts expect that program to continue.

More numbers: A great return on equity: 31.18% for the last 12 months. Operating margin was 11.10% and Profit margin was 7.47%. Trailing P/E is 8.8 and forward P/E is 10.26. Price to Sales is .63. Price to Book, 2.45. There's $2.3 billion in cash for total cash per share of $3.16. Total debt is $9.19 billion. Total debt to equity is .964. Current ratio is 1.10. Book Value is $13.13. The dividend takes about 30% of profits to pay. Value Line ranks the Financial Strength as A++.

This stock was hammered along with the rest of the market in the latter part of 2008, hitting lows not seen in almost a decade. The stock rebounded and is now trading 50% above its recent low but still well below its high of $63 a share seen in May of 2008. The price now seems to reflect most of the worst case scenario. But when investors begin to sense the worst of the economic damage is over, this stock should reflect that quickly with a meaningful move upward.

Company Web site: www.honeywell.com

- Ted Allrich