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.

January 9, 2012 - Apple Inc. (AAPL-NASDAQ), together with subsidiaries, designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players; and sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide.

Apple sells to consumers, small and mid-sized business, education, enterprise, and government customers through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers.

In addition, it offers various third-party iPhone, iPad, Mac, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals, through its online and retail stores; and digital content and applications through the iTunes Store, App Store, iBookstore, and Mac App Store. As of September 24, 2011, the company had 357 retail stores, including 245 stores in the United States and 112 stores internationally. Apple Inc. was founded in 1976 and is headquartered in Cupertino, California.

Everyone knows of Steve Jobs passing. He started it all, was the genius behind so many of Apple's products, the marketing guru that reinvented how products are sold. Now there's a new CEO: Tim Cook. Can he be another Steve Jobs? No. No one can. But the company is much more than one person. And there are plenty of products (and lots of cash) to keep its earnings engine firing on all 16 cylinders.

Let's look at earnings, the driving force behind all stock prices. For 2011 (fiscal year ended in September), earnings per share (EPS) were $27.68. For this year, 55 analysts have a consensus estimate of $34.75 (with a range of $28.50 to $38.24). For next year, they see $38.94 (with a range of $32.75 to $46.08). For the quarter ended in December, the estimate is for $9.87 compared to $6.43 in the same quarter in 2010. Earnings were a little disappointing in the final fiscal period, coming in at $7.05. Analysts thought they would be $7.39. Most of the shortfall came from the transition to the next generation iPhone as many enthusiasts waited for the latest version of their favorite device. That led to softer sales of the existing phone. Some think the weaker quarter suggests the best times are over. But that would be short sighted.

Apple has plenty of rocket scientists playing at its headquarters. Some of the smartest people on the planet work at Apple. They've invented many products and services. The pipeline for future growth is deep. New hardware and software is coming. Expect the company to gain more market share in computers and elsewhere and expand into new markets, even make new ones. A good example: tablets with the iPad. In the last quarter iPad sales jumped by 166%.

Sales should stay strong for the new iPhone 4S which is now sold at Sprint, Verizon and AT&T stores. The MacBook Air continues to ramp revenues. And the iPad is the dominant leader in tablets and should stay in that position even with new competitors using Android (Android comes from Google...it's their mobile operating system). Maybe the most exciting prospect for new sales is from the iCloud storage/syncing service. Analysts think this new way of computing will send earnings above $50 by 2015.

And don't forget about the cash. There's $24.952 billion of it as of the end of last quarter. Probably more now. There are a number of opportunities to use that cash: increase R&D which is currently only 2.2% of revenues; buy other companies (something Apple rarely does...they much prefer to develop everything in house); buy back shares; and/or start a dividend. Or it could do all of those at once.

Essential Numbers:
- Trailing P/E: 15.34
- Forward P/E: 10.91
- Price to sales ratio: 3.63
- Price to book: 5.12
- Profit margin: 23.95%
- Operating margin: 31.22%
- Return on equity: 41.67%
- Return on assets: 22.05%
- Revenues (last 12 months): $108.25 billion
- Total cash: $25.95 billion
- Cash per share: $27.92
- Total debt: 0
- Current ratio: 1.61
- Book value per share: $82.45
- 52 week change: 23.35%
- Total shares Outstanding: 929.41 million
- Held by insiders: .64%
- Held by institutions: 70.2%
- There is no dividend

Some investors may hesitate at these levels. The stock is near its all-time high. Some of the valuations are steep. But consider the extraordinary ROE of 42% and Return on assets of 22%. And there's no debt. There are very few stocks boasting these kinds of numbers or returns to investors.

- Company Web site: www.apple.com

Ted Allrich