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 14, 2008 - General Electric (GE-NYSE) operates as a technology, media, and financial services company worldwide. Its Infrastructure segment produces jet engines, turboprop and turbo shaft engines, and related replacement parts for use in military and commercial aircraft; wind turbines; aircraft engine derivatives; gas and steam turbines, and generators; drilling and production systems, compressors, turbines, turboexpanders, and industrial power generation equipment; diesel-electric locomotives; and water treatment solutions for industrial and municipal water systems.

Its NBC Universal segment provides network television services; produces television programs and motion pictures; operates television stations; owns various cable/satellite television networks; and operates theme parks. GE's Industrial segment offers home appliances; lamp products; electrical distribution and control products; motors and control systems used in end-industrial and consumer products; commercial lighting systems; protection and productivity solutions; handheld and portable field calibrators; equipment for detection of material defects; stand-alone measurement instrumentation; and systems for validating or certifying commercial and industrial processes.

The company was founded in 1892 and is based in Fairfield, Connecticut.

For the first time in a long time, GE really disappointed shareholders last quarter when it announced earnings of 44 cents a share, below analysts' expecations of 53 cents. With that, the stock price took a tumble, going down to its lowest level since 2003 and finding a bottom at $26.15, just a little below where it's trading now. Conservative investors should find this behemoth of interest.

The yield is well above average at 4.5% and is rather safe, taking up 55% of earnings to pay. The rate is 31 cents a quarter, raised from 28 cents last year. Earnings this year should be $2.22 (range of $2.15 to $2.26 with 16 analysts in the survey) and next year $2.39 (range of $2.30 to $2.55). The earnings this year will be flat with 2007 results.

The disappointment in no growth has put the stock at valuation levels rarely seen. The P/E (price to earnings ratio) is 12.5, a figure rarely observed in decades. That makes the relative p/e less than .8. Of course, the p/e reflects investors' sentiment on growth. Obviously there's scepticism. But analysts see this giant increasing earnings by an average of 9.5% a year over the next 5 years. Not too bad for a company with $172.7 billion in revenues last year and expectations of $187.91 billion this year and $196.90 billion next year.

GE isn't going to hope for the best. It's already put the appliance division up for sale. More will follow. Management is adamant about getting out of lower margin business and focusing on higher margin ones, even if it has to sell core businesses that contributed to its success since the beginning.
Furthermore, the company is expanding foreign business and extricating itself from domestic ones. The Financial Services group has to be under scrutiny to lessen its burden on the bottom line.

One area that is booming for GE is the infrastructure business. Analysts think this division will see double digit growth in earnings as its products and services stay in high demand globally. While increasing commodity prices is a concern here, GE has great cost controls and strong efficiencies to offset them.

This is a company that has not performed very well over the last 5 years. Now it's back relatively low levels, especially in valuation. Even if it were to recover only to its 52 week high of $42, the return would be very positive. And while patient investors wait, the dividend will be paid every quarter. Check out GE if you're patient and looking for a more conservative stock to hold.

- Company Website: www.ge.com

- Ted Allrich