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 29, 2011 - AmerisourceBergen Corporation, (ABC-NYSE) a pharmaceutical services company, provides drug distribution and related services to healthcare providers and pharmaceutical manufacturers in the United States, the United Kingdom, and Canada. The company distributes brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to various healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical and dialysis clinics, physicians, and long-term care and other alternate site pharmacies.

Further, the company sells distribution and other services to physicians, who specialize in various disease states; distributes vaccines, injectables, and plasma and other blood products; and provides commercialization services, third party logistics, nursing services, and other services for biotech and other pharmaceutical manufacturers, as well as reimbursement consulting, data analytics, practice management, and physician education services.

Additionally, it delivers unit dose, punch card, unit-of-use, and compliance and other packaging solutions to institutional and retail healthcare providers; and offers contract packaging and clinical trial material services for pharmaceutical manufacturers.

It has two segments: Pharmaceutical Distribution and PharMerica, its international pharmacy. The company serves customers through a network of distribution and service centers, and packaging facilities. AmerisourceBergen was founded in 1985 and is headquartered in Valley Forge, Pennsylvania.

ABC's price has gone almost straight up since the debacle of March 2009. It even split 2 for 1 in mid '09. From its low point of $13.80, it went to $43.50 earlier this year. It's taking a little break at the moment. Is it a good time to buy?

Part of the reason is the necessity of Amerisource's products. In fact, sales in the third quarter were most influenced by a 4% rise in the Drug Corp. revenues, reflecting added customers. It was more than enough to offset the loss of sales in the Specialty Group which suffered a large, discontinued contract. To help earnings further, management is cutting costs. There's also better sales in specialty generic drugs. Lastly, there are fewer shares to divide into the earnings.

The board has been busy buying stock. In fact, it recently authorized another $750 million program. It spent the $500 million on buybacks that started in September of 2010. Through the middle of August, the company spent $598 million on buying its own stock. That takes a lot of shares off the market and out of the earnings per share calculation. The company currently sits on over $2 billion in cash, so funding the purchases is no problem.

The company has grown internally and through acquisitions. It bought Gulf Distributors Inc. and Diabetic Shoppe, Inc. in 1996, added Walker Drug in '97. In 1999, it picked up C.D. Smith. With all that cash, expect more purchases, even with a strong stock buyback program.

Of course, it can also increase its dividend as well. Currently it's 46 cents a share, up from 34 cents last year. Payouts increased every year since 2005 when they were 3 cents a share. The yield is 1.2%.

Essential numbers: P/E is 15. Price to sales is .13. Operating margin for the last 12 months was 1.53% while Profit margin was .88%. Return on equity was a remarkable 22.84% and Return on assets was 5.26%. Cash per share is $7.43. Total debt is $1.36 billion. Total debt to equity is 42.52%. Current ratio is 1.11. Book value per share is 11.77. Price to book is 3.27. In the last 52 weeks, the stock is up 38.77%. There are 269.26 million shares Outstanding with a Float of 267.32 million. Insiders own .71% of the stock and Institutions have 93.2% of the Float.

Conservative investors should like this story. Earnings are setting records in tough economic times. Shares are being bought back. Efficiencies are creating better margins. And the stock recently is off its high. It just might be a good time to dig deeper into ABC.

- Company Web site: www.amerisourcebergen.net

Ted Allrich