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.

March 17, 2009 - United Parcel Service, Inc (UPS-NYSE) a package delivery company, provides transportation, logistics, and financial services in the United States and internationally. The company operates in three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight.

The Supply Chain & Freight segment offers forwarding and logistics services, including supply chain design and management, freight distribution, customs brokerage, mail, and consulting services; and less-than-truckload and truckload services to customers in North America. In addition, it offers various technology solutions for automated shipping, visibility, and billing; service, information technology systems, and distribution facilities to various industries, such as healthcare, technology, and consumer/retail; and a portfolio of financial services that provides customers with short-term and long-term financing, secured lending, working capital, government guaranteed lending, letters of credit, global trade financing, credit cards, and equipment leasing.

As of December 31, 2008, the company operated a fleet of approximately 107,000 package cars, vans, tractors, and motorcycles, as well as an air fleet of approximately 570 aircraft. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.

2008 was not kind to most companies, including UPS. The company saw earnings drop 25% compared to 2007, and sales fell by 5%. Package volume and average revenue per piece were down slightly. Revenues and profits felt the negative effects of fewer shipments, a product mix that had many lower-margin goods, and currency fluctuations. Profits were further damaged by higher costs, mostly from compensation increases in a Teamsters' contract.

But the year wasn't all bad. The company increased market share, mostly due to a competitor geting out of the U.S. market.

Earnings for 2008 finished at $3.50, down from $4.11 in 2007. For this year, analysts see further decline, to $2.86 a share but then predict a rebound to $3.34 in 2010. The first quarter results will be posted on April 23 with expectations of 57 cents a share, well below the 87 cents recorded last year in the first quarter. In the second quarter, look for 67 cents a share, again below last year's second quarter results of 85 cents.

Management hasn't sugar-coated this year. It announced that it sees negative trends continuing for a while. Product pricing and shipment volumes will most likely remain under pressure as well as rising costs from pension and compensation expenses. To counter some of the negative forces, management said it will initiate cost-cutting measures such as facilities closures, pay freezes, and suspension of 401(k) contributions. Analysts expect these cost savings to help but not fully compensate for rising costs.

There's some silver lining in the storm clouds covering global economies. While demand for its services will most likely decrease, the company will have the opportunity to increase market share even further as weaker local companies leave certain regions or go out of business. It's making considerable headway in Asia already, a very promising market. By lowering costs and expanding operations, UPS should establish itself as the premier provider of shipping services and further enhance its operating leverage.

More numbers: Trailing P/E is 15.3 while the Forward P/E is 13.5. Price to sales ratio is .83. Price to Book is 6.34. Operating margin for the last 12 months was 11.48%, and Profit margin was 5.83%. Return on Equity was a remarkable 31.67%. There's $1.05 billion in cash, making $1.05 per share. Total debt is $9.87 billion. Current Ratio is 1.13. Book Value per share is $6.80. There are 995.4 million shares outstanding with a float of 983.39 million shares. Institutions own 70% of the stock. There's a dividend of $1.80 which takes about 76% of earnings to pay.

UPS is a very economically sensitive stock. In fact, some investors look at its volume as a way to measure economic health. They use UPS revenues as a barometer, expecting all economic activity to show better results if UPS sales move noticeably higher, indicating that more goods are moving through the economy, reflecting higher demand. While the current global slowdown is affecting UPS, it should be one of the first beneficiaries when economies show recovery. In the meantime, investors receive a dividend that yields 4.2%. While the dividend takes a large percentage of earnings for this year, if analysts are correct, that percentage will get back to its normal levels of about 55% next year.

Company Web site: www.ups.com

- Ted Allrich