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.

May 5, 2009 - J.M. Smucker Co. (SJM-NYSE) engages in the manufacture and marketing of branded food products in the United States, Canada, and internationally. Its products include peanut butter, shortening and oils, fruit spreads, canned milk, baking mixes and ready-to-spread frostings, flour and baking ingredients, juices and beverages, frozen sandwiches, dessert toppings, syrups, pickles and condiments, packaged coffee products, and potato side dishes.

It also markets its products under the Pillsbury, Pillsbury Doughboy, Carnation, Borden,and the Elsie design brand names that are used under license, as well as under Folgers and Millstone brands.

It sells products primarily through brokers to food retailers, food wholesalers, club stores, mass merchandisers, discount stores, and military commissaries, as well as through retail channels, including foodservice distributors and operators, such as restaurants, schools and universities, and healthcare operators; and health and natural foods stores and distributors. The company was founded in 1897 and is headquartered in Orrville, Ohio.

You remember the peanut butter salmonella problem. None of Smucker's brands was tainted, but sales have been affected. The stock has been hurt by the association. And the economic downturn also dinged sales as consumers switched to more generic brands of peanut butter and jelly. Those are the two red flags. Pretty much everything else looks positive.

First, the company is responding to current times by cutting personnel to reflect lower sales. Volume was down 7% in the third quarter (fiscal year ends April 30). For 2009, the company has stated an objective of saving $80 million, most of it coming from cuts in the sales group and administrative personnel. It's also raising prices. Just how effective that can be when consumers are already looking to save money remains to be seen.

Earnings this year will be above last year with analysts seeing $3.22 for 2009 (vs $3.15 in 2008). For 2010, they expect $3.37. The last quarter of 2009 (ended April 30) should show 60 cents a share, down from 73 cents in 2008. For the July quarter, analysts estimate 75 cents, down from 82 cents in the same quarter last year. The recent Folgers Coffee acquisition is hurting earnings with some noncash amortization charges.

However, revenues will be enhanced by Folgers Coffee, going from $590 million in the fourth quarter last year to $998.64 million in the last quarter of this year. Total sales should jump by 45.8% for the year 2009, compared to $2.52 billion last year. For 2010, analysts predict $4.65 billion.

If you have a longer term view, Smuckers looks pretty good. The company has some of the most prime shelf space in most grocery stores: the center aisles. That was strenghthened by adding Folgers Coffeee. The center aisle space is not easily gotten. Furthermore most of what Smuckers sells is staples. How can kids go to school without their PBJ's? While some consumers will switch to lower cost brands, when the economy returns they will most likely pick up Jif and Smuckers jams and jellies again.

More numbers: Forward P/E is 12. Price to sales is 1.43. Price to Book is .95. Operating margin was 12.19% for the last 12 months; profit margin was 6.37%. Return on equity was 6.17%. Total cash is $360 million for $3.31 a share in cash. Total debt is $1.54 billion. Current ratio is 1.19. Book value is $41.50 share. There are 118.43 million shares outstanding. Insiders own 3.54%. Institutions have 73.70%. The dividend is $1.40 a year, giving a yield of 3.54%.

Smuckers is a solid company (Value Line ranks the stock A for Financial Strength), gives a decent dividend, and holds valuable space in most grocery stores. When the economy recovers, expect to see this stock reflect that.

Company Web site: www.smuckers.com

- Ted Allrich