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 25, 2008 - Abbott Laboratories (ABT-NYSE) engages in the development, manufacture, and sale of health care products worldwide. It operates in four segments: Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Vascular Products.

The DiagnosticProducts segment provides diagnostic systems and tests for blood banks, hospitals, commercial laboratories, physician's offices, alternate-care testing sites, and plasma protein therapeutic companies. This segment's products include immunoassay systems; chemistry systems; assays for screening and diagnosis for drugs of abuse, cancer, therapeutic drug monitoring, fertility, physiological diseases, and infectious diseases, such as hepatitis and HIV; genomic-based tests; hematology systems and reagents; and point-of-care diagnostic systems and tests for blood analysis.

The Nutritional Products segment offers pediatric and adult nutritional products through its own distribution centers or public warehouses to retailers, wholesalers, health care facilities, and government agencies.

The Vascular Products segment provides a line of coronary, endovascular, and vessel closure devices for the treatment of vascular diseases. It also offers blood glucose monitoring meters, test strips, data management software, and accessories for people with diabetes.

Abbott has a 50% owned joint venture with TAP Pharmaceutical Products, Inc.; a strategic alliance with Celera Group; and a collaboration with Genentech, Inc. to develop anti-cancer compounds. The company was founded in 1888 and is based in Abbott Park, Illinois.

These are busy labs, and there's plenty to show for the work. Earnings, over the last 5 years, increased at a rather mediocre rate of 6.5% a year, on average. Sales were moving ahead by 6.5% as well. But in the next 5 years, analysts see both the top and bottom lines getting boosts, going to 9.5% increase a year for revenues and 11.9% a year in earnings.

Earnings were $2.50 a share in 2005, then went to $2.52, followed by $2.84 last year. This year, analysts' consensus for earnings is $3.27 and $3.66 next year. Earnings for the September quarter are forecast at 77 cents a share, up from 67 cents last year. For the final quarter, watch for $1.03, up from 93 cents in comparable quarter a year ago.

Revenues were $22.336 billion in 2005, went to $22.476 billion in 2006, then $25.914 billion last year. This year, analysts see a jump to $29.6 billion and $32.08 billion next year.

The reason for the upward moves: worldwide sales increased 15% to $7.3 billion in the second quarter vs last year's second quarter. Pharmaceuticals saw the biggest improvement with sales of HUMIRA, Niaspan and Kaletra. Almost 40% of the revenue growth came from the weakness in the dollar, contributing $400 million in currency gains. The bottom line advanced from higher volume and increased profitablity in gross and operating margins.

Expect continued good results. Abbott received 8 regulatory approvals for new products and is about to launch 4 new ones, namely Simcor, XIENCE, TriLipix and Vicodin CR. The latest product, XIENCE V stent, approved in the U.S. only recently, has been well received and contributing to sales and profits already.

That stent seemed to be the fuse that lit the stock's price. Since July, the stock is higher by 10%, breaking out of a rather tight range over the last 6 years. In fact, it recently traded at an all-time high of $61.10.

Other numbers: P/E is at 21.4. The average annual P/E for the last 5 years ranged between 17.9 and 19.2. Price to Sales ratio is 3.27. Price to Book is 4.78. Profit margin is 15.1%. Return on Equity is a very positive 24.38%. Value Line rates the company as an A++ for financial strength. There are 1.54 billion shares outstanding.

Abbott Labs should appeal to investors looking for solid growth, financial strength and a decent dividend. While the dollar weakness has contributed to profits, it's not the main reason for new success. When the dollar strengthens, it will be noticed in earnings but not enough to slow their real growth.

- Company Web site: www.abbott.com

- Ted Allrich