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.

August 18, 2008 - Wal-Mart Stores (WMT-NYSE) operates retail stores in various formats worldwide. The company's Wal-Mart Stores segment offers general merchandise, including apparel,domestics, fabrics and notions, stationery and books, shoes, housewares, hardware, electronics, home furnishings, small appliances, automotive accessories, horticulture and accessories, sporting goods, toys, pet food and pet accessories, cellular phones and cellular service plan contracts, cameras and supplies, health and beauty aids, pharmaceuticals, jewelry, and opticals; and grocery merchandise,financial services and products, and photo processing services through supercenters, discount stores, and neighborhood markets in the UnitedStates, as well as through walmart.com.

The company's International segment includes various formats of retail stores and restaurants, including combination discount and grocery stores, supercenters, Sam's Clubs, hypermarkets, supermarkets, cash-n-carry stores, neighborhood markets, department stores, and general merchandise stores.

As of January 31, 2008, Wal-Mart operated 971 discount stores, 2,447 supercenters, 132 neighborhood markets, and 591 Sam's Clubs in the United States; and 21units in Argentina, 313 in Brazil, 305 in Canada, 149 in Costa Rica, 70 in El Salvador, 145 in Guatemala, 47 in Honduras, 394 in Japan, 1,023in Mexico, 46 in Nicaragua, 54 in Puerto Rico, and 352 in the UnitedKingdom, as well as 202 stores through joint ventures in China. The company was founded in 1945 and is based in Bentonville, Arkansas.

WMT just announced earnings of 87 cents a share, up 17% from the same quarter last year. That's income of $3.45 billion in three months. Revenues hit $102.7 billion in the quarter, up 10.4% from last year's comparable quarter. There was a one cent gain from discontinued operations in the quarter's profits. Next quarter management forecasts 73 cents to 76 cents a share. For the full year, it suggests $3.43 to $3.50 a share, up from an earlier prediction of $3.43. Last year, earnings were $3.14 a share. Next year, analysts see $3.86.

These higher numbers are coming at a particularly difficult time for most consumers and other retailers. Obviously Wal-Mart is giving good value and executing an efficient business plan. It's cut back on trying to appeal to higher-end shoppers who couldn't find their way to the apparel and home-goods departments. The company's renewed focus is on price and recently added exclusives such as Hannah Montana, Ocean Pacific and l.e.i junior apparel lines and Canopy bed sheets.

Other price driven offerings: meals for families of four for under $10, clothing below $10 and $4 generic-prescription drugs. It also added major brands like Sony and Apple to its electronics section.

International expansion is part of the story here. In particular, there are new stores in Brazil and China, two very strong, growing economies. The company opened 3 small stores in India and is working on store openings in Russia and Eastern Europe. Sales outside the U.S. jumped by 17% in the latest quarter, compared to 8.5% domestically at Wal-Mart and 8% at Sam's Clubs. Operating profit from overseas sales was up 16.5%, well beyond U.S. growth rates. The company announced it would invest $1 billion to expand in Brazil where sales were ahead 17% this quarter.

Offsetting the good news is the cost of food (for meals and groceries) and utilities such as gas. Both are going higher. If unabated, profit margins will definitely be squeezed. But if costs can be passed along to very savvy shoppers, bottom line growth will continue. That doesn't seem as likely in these days of high priced gas and groceries. The company, in order to save capital and cut costs, is slowing its supercenter growth rate and lowered its capital-spending budget.

Some numbers: Price to Book is 3.61. Price to sales is .59. P/E is 18.26. Yield is 1.1% from a dividend of 95 cents a share. Total debt is $48 billion, making a Debt to Equity ratio of .76. Over the last 5 years, earnings grew at an average of 11.72 % a year. For the next 5 years, analysts predict 11.73%.

Wal-Mart is a healthy, growing company, offering consumers great values. That's paid off handsomely, even when the rest of retail suffered. There doesn't appear to be any reason to doubt further positive growth will continue. However, costs of raw materials for food and rising utility bills will affect growth unless management can pass along the higher prices, something they're loathe to do. Especially since its customers hate higher prices even more.

- Company Web site: www.walmart.com

- Ted Allrich