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 24, 2008 - Johnson & Johnson (JNJ-NYSE) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. Its Consumer segment provides products used in baby care, skin care, oral care, wound care, and women's health care fields, as well as nutritional and over-the-counter pharmaceutical products under AVEENO, BAND-AID, CAREFREE, CLEAN & CLEAR, JOHNSON'S, LISTERINE, MOTRIN IB, NEUTROGENA, RoC, PEPCID AC, REMBRANDT, SPLENDA, STAYFREE, SUDAFED, and TYLENOL brands.

Johnson & Johnson's Medical Devices and Diagnostics segment offers circulatory disease management, orthopaedic joint reconstruction and spinal care, wound care and women's health, minimally invasive surgical, blood glucose monitoring and insulin delivery, and diagnostic products, as well as disposable contact lenses. The company was founded in 1885 and is based in New Brunswick, New Jersey.

JNJ delivers more than drugs. It puts earnings, consistently, to the bottom line. Over the last 5 years, it's grown earnings, on average, 10.7% annually. This year analysts look for an improvement of 8.4% and 4.9% next year. That makes earnings totals of $4.50 for 2008 and $4.72 in 2009. Last year, earnings per share came in at $4.15. For the third quarter (to be reported on October 14), consensus estimates are for $1.11, for the fourth quarter 96 cents.

This is obviously not a growth company, not anymore. The law of large numbers has caught up with this behemoth (revenues were $61.10 billion last year, expectations are for $64.85 billion this year and $66.12 billion next year, a gain of 6.2% and 2% respectively). It's hard to grow significantly when you reach a certain size. New markets and new products have to be unusually large to make a noticeable contribution.

JNJ is more about consistency, quality, and profitability. Net profit margin for the last 12 months was 18.64% with an operating margin of 25.45%. Being in the healthcare business is very healthy. As for consistency, it shows in the ever increasing profitability as well as in the stock price. Over the last year, the S&P 500 index has gone down 18.27% while JNJ stock has risen by 10.6%. And very few companies enjoy the reputation JNJ has earned over the years, striving to deliver the best to customers. It's one of the most trusted companies by consumers.

JNJ is taking advantage of its stellar financial position. Management increased debt last year, raising total long term borrowings to $7 billion, more than 3.5 times the amount a the end of 2006. Even with the extra financing, debt is only 13.6% of the balance sheet. Most of the money is for buying back common stock.

Some of the numbers: The dividend was recently hiked to 45 cents a share, up 11% from last year. The P/E is 16.6. In the last 52 weeks, the stock is up 11% compared to the S&P500 index which was down 15.54%. Price to Sales is 3.03. Price to Book is 4.22. There's $3.95 in cash per share.

If a solid, well established and respected, high quality, multi-product, global health care company is part of your portfolio search, JNJ is a good way to spend some of your research time. Don't expect great growth (except maybe in the dividend). It's too big for that. Do expect solid, stable performance.

- Company Web site: www.jnj.com

- Ted Allrich