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.

July 11, 2011 - International Business Machines Corporation (IBM-NYSE) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services.

Systems and Technology provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics.

Global Financing has lease and loan financing for end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

One of the great strengths of IBM is that it offers hardware and software and maintenance for both. Right now it's hardware that's selling best. For the first quarter, systems revenues were up 19%. That's servers, point of sale retail systems and semiconductors. Software, however, was also better in the first period, gaining 10% in sales over the first quarter last year. Services also improved, adding 6% more than the same quarter in 2010. Sales were stronger across the board and so were margins.

Management has ambitious plans for Big Blue. Target earnings by 2015 are $20 a share. To get there, look for more focus on emerging nations where markets are just beginning to develop as well as more emphasis on higher margined products such as software. The last time management set objectives, they were met well before the deadline date.

Earnings show good growth now. They've been up every year since 2002 when they were $3.95 a share. In 2010, they hit $11.52. This year, 26 analysts have a consensus of $13.22 a share (with a range of $13 to $13.43). For 2012, they're seeing $14.61. For the June quarter, expect $3.03 a share vs $2.61 last year in the second quarter. For the third period, analysts have $3.18 compared to $2.82 in 2010's third.

One area of concern: services. Contracts fell by 27% in the first quarter. Services carry some of the best margins. Still backlog is strong, and analysts see Services' revenues gaining 3% by the end of the year.

Conservative investors look at Financial Strength for comfort. IBM carries one of the strongest ratings of any company on the planet: A++. While debt is 49% of Capital, the company's strong cash flow and profitability have investors' bidding up any bond issue the company wants to sell. Earnings are 27 times the cost of long term interest expenses. Also, four-fifths of its debt is dedicated to financing activities which means that it receives higher interest payments than it makes.

The Japanese market was hurt by the earthquake/tsunami, but IBM's exposure was minimal. Most of its contracts in Japan are for services which are long term contracts. The country represented 11% of 2010's total revenues.

Essential numbers: Forward P/E is 12. Price to sales ratio is 2.1. Price to book is 9.43. Operating margin for the last 52 weeks was 19.92%. Profit margin was 14.85%. Return on equity was 67.20% while Return on assets was 11.60%. Total revenues were $101.62 billion. Total cash is $13.28 billion. Total cash per share is $10.96. Total debt is $30.26 billion. Current ratio is 1.18. Book value per share is $18.72. The stock is up 37.93% in the last year. There are 1.21 billion shares Outstanding with a Float of the same number. Institutions have 61% of the stock. The dividend is $3.00 a share for a yield of 1.70%.

IBM has been a juggernaut for decades. It originally was all about machines. Now it's about machines, software and maintenance services. It seems to evolve as its customers' needs require it. Management has always been stellar at Big Blue. And with its new objective clearly in focus, expect IBM to continue to deliver good news for its shareholders.

- Company Web site: www.ibm.com

- Ted Allrich