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.

November 11, 2008 - MDU Resources (MDU-NYSE) operates as a natural resource company in the United States. Its Electric segment generates, transmits, and distributes electricity in Montana, North Dakota, South Dakota, and Wyoming.

Its Construction Services segment engages in electric line construction, pipeline construction, utility excavation, inside electrical wiring,cabling and mechanical work, and fire protection, as well as the manufacture and distribution of specialty equipment for utilities and manufacturing, commercial, government, and institutional customers.

The company's Pipeline and Energy Services segment provides natural gas transportation, underground storage, and gathering services through pipeline systems primarily in the Rocky Mountain and northern Great Plains regions.

Its Natural Gas and Oil Production segment engages in the acquisition, exploration, development, and production of natural gas and oil resources in the Rocky Mountain and Mid-Continent regions of the United States, as well as in the Gulf of Mexico.

The company's Construction Materials and Contracting segment involves mining, processing, and selling construction aggregates, such as crushed stone, sand, gravel, and related construction materials, including ready-mixed concrete, cement, asphalt, and liquid asphalt. This segment also performs integrated construction services.

As of December 31, 2007, thecompany provided electric services to approximately 120,000 residential, commercial, industrial, and municipal customers located in 177 communities; and sold natural gas to approximately 234,000 residential, commercial, and industrial customers in 145 communities. MDU Resources Group was founded in 1924 and is based in Bismarck, NorthDakota.

MDU is a busy company, in the right business at the right time. In the first half of the year, earnings jumped by 50%, thanks to higher gas and oil prices as well as more prodution. Revenues and earnings increases were helped by the July, 2007, acquisition of Cascade Natural Gas which boosted earnings for the Construction Services group.

Now, it's a different story. Oil and gas prices are down noticeably from the first half of the year. Investors have noticed. The stock is off over 40% from its recent all-time high of $35.30 (prices adjusted for stock splits). Along with lower prices for oil and gas, there's the slump in housing starts which hits the Construction Materials group. Backlog is down, especially in the private construction. There's still good demand from public construction, but it has lower margins. That sector could cool as well as state revenues from taxes continue to decline.

The company continues buying others. In January of this year, it purchased Intermountain Gas which has 302,000 customers in Idaho. That was after the acquisition last July of Cascade Natural Gas. With a strong balance sheet, it could continue adding companies as the economy weakens.

Earnings should be $2.10 this year, up from $1.76 in 2007. Next year, analysts see $2.00, reflecting the general weakness in the economy. Earnings have increased every year since 2002, when they were 82 cents a share. For the December quarter, look for 46 cents a share, down from 52 cents a share in the same quarter last year.

More numbers: Revenues should be $5.04 billion this year, up from $4.25 billion last year. Next year, analysts see a flat sales report at $5.03 billion. P/E (price to earnings) is 8.84 while the forward p/e is 9.6. Price to sales is .69. Price to Book is 1.32. Operating margin for the last 12 months was 13.88% while Profit margin was 8.09%. There's $95.81 million in cash in the bank. Debt to Equity is .63. Book Value is $14.06. The stock carries a relatively high beta of 1.51. There's an annual dividend of 62 cents, giving the stock a yield of 3.3%. That dividend takes only 28% of the profits to pay. Value Line gives the company an A+ for financial strength.

The economic weakness will show up in lower earnings for a while. Not too much, unless things get much worse. The company has shown good results for years. It's aggressively adding to its core business through acquisitions. Furthermore, the company is getting good readings from initial drilling in new sections of North Dakota and Utah. While there's nothing to suggest a quick bump in earnings or a big positive surprise, this is a stock that should appeal to conservative investors who have an interest in a decent, relatively safe dividend as well as prospects for growth. Further research will most likely give any investor more confidence and is recommended.

Company Web site: www.mdu.com

- Ted Allrich