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 21, 2009 - Sanofi-Aventis (SNY-NYSE) a pharmaceutical company, contributes to enhancing life by providing medicines, vaccines, and integrated healthcare solutions adapted to local needs and means primarily in Europe and the United States. The company has products in the areas of thrombosis, cardiovascular, metabolic diseases, oncology, central nervous system, internal medicine, and vaccines.

Sales of SNY's products are doing particularly well in Asia/Pacific Japan where they increased by 13% in the first quarter and up 16% in Eastern Europe. Its most recent news was an order for 28 million doses of flu virus vaccine (the swine flu) from the French government with another optional 28 million dose order. Total revenues in 2008 were: 37% in Europe, 33% in North America, Other regions: 30%.

Also in the first quarter, Sanofi bought 3 companies, adding to their marketing efforts in Eastern Europe, Brazil, and Mexico. Analysts believe these will be immediately positive to earnings. Another factor for increased sales: the FDA recently approved a new drug for atrial fibrillation. After initial start-up costs, the drug should contribute to earnings in about 3 quarters.

One concern for SNY is its drug Lantus (insulin that has been chemically altered to make it longer-acting). There is speculation of a link between Lantus and increased cancer risk. However, many experts have testified that studies showed inconsistent and inconclusive results in regard to this charge. The panel of experts were hired by Sanofi. The expert statement is "a reasonable document," says John Buse, chief of endocrinology at the University of North Carolina at Chapel Hill School of Medicine and past president of the American Diabetes Association. He did not serve on the panel. "If I were a betting man, I'd say I do not believe that Lantus causes cancer," Buse says.

SNY's stock price was on a downward path most of last year, going from $49 to $24. It has rebounded a little. With earnings expected this year of
$4.31 (up from $4.04 last year) and $4.32 next year (consenus from 2 analysts covering the company), the forward P/E is only 7.34, relatively attractive for a company expected to grow earnings by 10% a year over the next 5 years. Quarterly results will be announced on July 29.

More numbers: Total sales for 2009 should be $43.05 billion, up from $40.57 billion in 2008. Next year expect $46 billion. Debt is only 9% of the balance sheet. Price to Book is 1.25. The dividend is $1.49 for the year, paid on April 29. (Like most foreign companies, the dividend is paid once, annually, not quarterly.) The profit margin for the last 12 months was 14.13%.

Sanofi-Aventis has a strong balance sheet, a new CEO and a new approach to business. It will lower development risks by partnering with other firms (also lowering its returns from those new drugs). Growth through acquisitions should continue as the company has a strong cash flow and little debt. Conservative investors should find a lot to like with this company.

Company Web site: www.sanofi-aventis.com

Ted Allrich