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.

February 23, 2009 - PPG Industries, Inc. (PPG-NYSE) manufactures and supplies protective and decorative coatings. The company offers coating products for automotive and commercial transport/fleet repair and refurbishing, specialty coatings for signs, and light industrial coatings; and sealants, coatings, and technical cleaners/transparencies for commercial, military, regional jet, and general aviation aircraft and transparent armor for military land vehicles.

In addition, PPG sells industrial and automotive coatings to manufacturing companies; adhesives and sealants for the automotive industry; metal pretreatments and related chemicals for industrial/automotive applications; and coatings and inks for aerosol, food, and beverage containers.

It makes lenses, sun lenses, optical materials, and polarized film; amorphous precipitated silicas for tire and battery separator markets; and synthetic printing sheet used in waterproof labels, e-passports, drivers' licenses, and identification cards.

Additionally, PPG offers chlor-alkali and derivative products, such as chlorine, caustic soda, vinyl chloride monomer, chlorinated solvents, calcium hypochlorite, ethylene dichloride, and phosgene derivatives to chemical processing, rubber and plastics, paper, minerals, metals, and water treatment industries.

It also produces flat glass and continuous-strand fiber glass for commercial and residential construction, wind energy, energy infrastructure, transportation, and electronics manufacturing companies. PPG sells its products through company-owned stores, home centers, paint dealers, and independent distributors, and directly to customers worldwide. The company was founded in 1883 and is headquartered in Pittsburgh, Pennsylvania.

That's a lot of stuff. Besides making all that, PPG also makes money, though not as much as it did before the economy started to tank. In 2007, earnings per share hit an all-time high of $5.03. That pushed the stock to its all-time high of $82.40, but it's been downhill ever since. PPG trades now at levels not seen in decades. So is it on sale or headed lower? Here's what we know.

Earnings are projected to be less in 2009, going to $3.25, down from $4.47 in 2008. In 2010, analysts expect a bounce to $3.91. Quarterly earnings will be announced in April. Look for 29 cents a share vs $1.07 last year in the first quarter. Projections are for 97 cents in the June quarter, down from $1.62 in June of 2008. So the earnings are headed in the wrong direction, for the moment.

Revenues for the full year are seen at $14.20 billion compared to $15.85 billion in 2008, down 10.4%. For 2010, analysts see a rise of 2.9% to $14.62 billion. Of course, all numbers are subject to revisions if the economy doesn't begin to recover soon. Most analysts are looking for some signs of improvement by late 2009 or early 2010.

PPG feels the economic ills, serving a wide variety of industries such as auto, commodity, construction and industrial. International sales were 48% of total revenues in 2007 so a stronger dollar can only hurt. Furthermore, the company just had a $50 million pension expense added to its obligations which will cost about 21 cents a share.

On the positive side is the new acquisition of Sigma-Kalon, a firm specializing in sales to architectural products. It should add about 45 cents a share to the bottom line in 2009, even with a slow down in sales. When the economy recovers, the benefit will be even greater. Also, cost inflation pressures should abate in 2009 as raw materials and commodities have prices deflate.

Another positive: $516 million in cash. The company can do a lot with that. Some alternatives are buy back stock, pay down debt, raise the dividend or buy more companies. About that dividend: the company has raised it every year for the last 37 years. So it's a priority for management. At the moment, it takes about 64% of earnings.

One more positive: by 2010, the new stimulus program should be a benefit to the Industrial Coatings division of PPG since one of the priorities is to improve domestic infrastructure. The group provides coatings for steel and other construction materials.

The numbers: Trailing P/E is 9.82 with a Forward P/E of 8.17. Price to Sales is .34. Price to Book is 1.28. For the last 12 months, Operating margin was 8.47% and Profit margin was 3.4%. Return on Equity was 12.88%. Debt to Equity is .33. Book Value is $25.60. There are 164.21 million shares outstanding and a float of 163.1 million. Insiders own .17%. Institutions own 67.9%. The annual dividend is $2.12 for a yield of 6.5%.

PPG's shares have been on a downward path for the last 18 months, hitting new 52-week lows every month. When will they stop? Nobody knows. But at some point, if investors feel the dividend is safe enough, the stock will trade based on its yield which is substantial in a market where CD's and other rates are much lower. Of course, there's a higher risk with a dividend yield than a treasury or CD, but then the reward is so much greater. And with a Financial Rating of A from Value Line, the stock should be able to weather the global economic storm and emerge intact. Maybe even bigger than when the slowdown started since it's got over $500 million to work with in a market where everything seems to be on sale.

- Company Web site: www.ppg.com

- Ted Allrich