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 15, 2010 - Air Products and Chemicals, Inc. (APD-NYSE) offers atmospheric gases, process and specialty gases, performance materials, and equipment and services worldwide.

Its Tonnage Gases segment provides hydrogen, carbon monoxide, nitrogen, oxygen, and syngas principally to the energy production and refining, chemical, and metallurgical industries, as well as produces dinitrotoluene used in the manufacture of a precursor of flexible polyurethane foam.

The company's Electronics and Performance Materials segment offers specialty gases, such as nitrogen trifluoride, silane, arsine, phosphine, white ammonia, silicon tetrafluoride, carbon tetrafluoride, hexafluoromethane, critical etch gases, and tungsten hexafluoride, as well as tonnage gases, specialty chemicals, and services and equipment for the manufacture of silicon and compound semiconductors, thin film transistor liquid crystal displays, and photovoltaic devices. This segment also provides performance materials primarily for coatings, inks, adhesives, civil engineering, and personal care products.

Its Equipment and Energy segment designs and manufactures cryogenic and gas processing equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and helium distribution, as well as offers plant design, engineering, procurement, and construction management services principally to chemical and petrochemical manufacturing, and oil and gas recovery and processing industries. The company was founded in 1940 and is based in Allentown, Pennsylvania.

Earnings took a hit in 2009, going to $4.06 from $4.97 in 2008. But last year (fiscal year ends in September), they were up 24% to $5.02 a share. This year, 18 analysts see $5.64, then $6.30 in 2012. Next quarterly earnings are due in January. Expect $1.33 compared to $1.16 this year in the first. For the second quarter, expectations are for $1.37 vs $1.23. Over the last 5 years, average annual growth in earnings was 7.71%. Analysts think the next 5 will show 10.10% a year, on average.

Air Products wants to take over its main competitor Airgas (ARG). The company put 3 directors on the board at the annual meeting in September. Air Products talked directly to management at ARG but was rebuffed several times. Now it's hard ball time. APD raised its bid to $65.50, all cash, for shares of ARG it doesn't already own. That's $5.50 higher than its last bid in January and a 50% premium over the average price of ARG before the first announcement. But investors think the ultimate price will be higher as ARG currently trades above APD's offer.

Without ARG, the company is doing very well. Bigger orders are flowing in for Merchant and Tonnage Gases and Electronics and Performance Materials. Sales for 2010 were $9.026 billion, up from $8.256 billion in 2009. Analysts predict $9.80 billion this year and $10.58 billion next year. Over the last 5 years, average annual sales gains were 9.5%.

More numbers: Trailing P/E is 17.85 but Forward P/E is 13.43. Price to sales ratio is 1.98 while Price to book is 3.22. Operating margin for the last 12 months was 16.51% and Profit margin was 11.40%. Return on equity was 19.91% and Return on assets was 7.03%. There's $374.30 million in cash for $1.76 a share. Total debt is $4.13 billion. Debt to equity is .74. Current ratio is 1.35. Book value per share is $26.07. Beta is 1.20. There are 212.80 million shares outstanding with a Float of 212.45 million. Insiders own .05% of the stock. Institutions have 84.60% of the Float. Annual dividend is $1.96. The last ex-dividend date was on September 29. It takes 41% of current earnings to pay the dividend. Financial Strength is A+.

Air Products has turned things around quickly. Demand is up as the global economy revives. If management can capture Airgas, look for it to contribute as much as 25% more to the bottom line. If that deal gets done, expect this stock to close in on the all-time high, if not surpass it.

- Company Web site: www.airproducts.com

- Ted Allrich