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.

September 29, 2009 - CVS Caremark (CVS-NYSE) a pharmacy services company, provides prescriptions and related healthcare services in the United States. The company operates through two segments, Pharmacy Services and Retail Pharmacy.

The Retail Pharmacy Segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, photo finishing, seasonal merchandise, greeting cards, and convenience foods through its pharmacy retail stores, and online. This segment also provides health care services. As of December 31, 2008, this segment operated 6,923 retail drugstores located in 41 states and the District of Columbia; and 560 retail health care clinics in 27 states. The company was founded in 1892 and is headquartered in Woonsocket, Rhode Island.

CVS stock swooned with the best of them last year, going from an all-time high of $$44.30 (split adjusted for a 2 for 1 split in 2005) to a low of $23.20. It was only after March that the stock started its upward climb, and it advanced more than 50% to a current level of $35. Will it recapture the old high ground? Here's what I could find out.

CVS's earnings grew, on average, by 21% a year over the last 5 years. Analysts see annual average increases of 13% going forward. Last year, earnings per share were $2.44. This year, the 20 analysts who cover the stock, have a consensus estimate of $2.62. For next year, they see $3.01. Third quarter results will be out on November 5 and are expected to be 64 cents a share, a little better than the 64 cents for the third quarter of last year. For the fourth quarter, expectations are for 79 cents a share, above the 70 cents made in 2008 in the fourth.

One interesting data point to consider: the P/E ratio for CVS is currently near its lowest level over the last decade: 15. And if the Forward P/E is used, the ratio is notably below, at 11.7. This is a stock that usually carries a P/E closer to 19 or better over the last ten years. Of course, the growth over that time period was better as the company expanded and bought its way to become the largest drugstore chain in the U.S.. Some would argue the potential isn't as great as it was, especially with a stalled economy.

But the company is a leader in another field as well: Pharmacy services, a market that will continue to expand as healthcare takes a new direction. It still has the highest number of drugstores, and it's large Pharmacy benefits manager program has a distinct advantage over its competition, namely the ability to distribute drugs to more clients. Plus, this is a company with aggressive management which has shown its ability to manage capital and grow the business successfully, both internally and through acquisitions.

More numbers: Price to sales ratio is .54. Price to book is 1.42. Book value is $24.80. Operating margin for the last 12 months was 6.64% while Profit margin was 3.55%. Return on equity was 9.85%. There's $1.23 billion in cash which is 85 cents a share. Total debt is $11.04 billion which is 17% of capital. Current ratio is 1.31. There are 1.44 billion shares outstanding. Institutions own 86.6% of them. There's an annual dividend of 30 cents which gives a yield of .9%. Next dividend date is November 2. The ex-dividend date is October 20. Value Line gives the stock a Financial Strength rating of A.

Conservative investors should find this stock of interest. It has a strong market presence, a good operating history, proven management, and lots of potential. Just watch what comes from the healthcare proposals. If there is some change in benefits that is adverse to drug re-imbursement, it could negatively impact CVS.

- Company Web site: www.cvs.com

- Ted Allrich