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 8, 2011 - Avista Corporation (AVA-NYSE), an energy company, engages in the generation, transmission, and distribution of energy and other energy-related businesses in the United States and Canada. It operates in two segments, Avista Utilities and Advantage IQ.

The Advantage IQ group provides sustainable utility expense management and energy management solutions to multi-site companies in North America. It offers invoice processing, auditing and payment services, energy procurement, reporting, advanced analysis, and consulting services.

In addition, the company engages in the custom sheet metal fabrication of electronic enclosures, parts, and systems for the computer, telecom, renewable energy, and medical industries; real estate investments, primarily commercial office buildings; and investing in emerging technology venture capital funds and low income housing. Avista Corporation was founded in 1889 and is headquartered in Spokane, Washington.

It's time to find some shelter in this stock market storm. Avista may be as good a place as any for Conservative investors. This electric utility has improved earnings every year since 2007, going from 72 cents to $1.36 to $1.58. Last year, it finished with $1.65. This year, 6 analsyts have a consensus estimate of $1.78, then see $1.88 in 2012. Nothing to get excited about, and that's exactly what should give investors some comfort. Slow and steady as she goes is much more appealing these days.

Management filed for rate increases in Washington state, up 9.1% for the electric rates and up 4% for the gas rates. That would generate an additional $45 million in revenues if approved. Look for a decision by April of next year. The company isn't earning its allowed rate of return on equity because of regulatory delays. Hopefully, these requests will be granted and sooner than spring of next year.

There's been a filing with the Idaho regulators as well. AVA is seeking electric and gas hikes, up 3.5% for electric and 2.8% for gas. Combined they would increase sales by almost $11 million. That should be decided by early 2012.

First quarter earnings showed significant improvement over last year's first period, coming in at 73 cents a share vs 52 cents. The company had a good rainy season which created favorable hydro conditions and raised profitability. There was also a fuel adjustment clause in the Washington service that aided earnings.

The dividend has gone higher every year since 2002 when it was 48 cents a share. Last year, it was $1.00. This year, it's on track to be $1.10. Analysts think next year, it will reach $1.18. The payout takes about 60% of earnings so it's a fairly certain payment, especially if the rate increases are granted.

The revenue base (total sales were $1.558 billion last year, look for $1.65 billion this year, then $1.69 billion in 2012) from electric generation is 30% residential, 27% commercial, 12% industrial, 17% wholesale, and 14% other. Sources are: Hydro, 27%, gas, 13%, coal, 13%, wood waste 2% and bought from others 45%. Fuel costs were 52% of revenues in 2010.

Advantage IQ continues to gain in importance as customers want more services such as consulting on how to purchase energy and better energy usage. The company is now staffed to offer these. Analysts think this division will add 13 cents to 16 cents in earnings this year, compared to 13 cents in 2010.

Essential numbers: Trailing P/E is 12.05 while Forward P/E is 11.96. Price to sales ratio is .84. Price to book is 1.14. In the last 12 months, Operating margin was 15.66% and Profit margin was 6.68%. Return on equity was 9.37% and Return on assets was 4.12%. Total debt is $105.99 million. Current ratio is 1.02. Book value per share is $20.14. There are 57.63 million shares Outstanding. Institutions have 71% of the stock.

Conservative investors will want to look deeper into AVA as a possible addition to their portfolios. The dividend is relatively safe, and the return is attractive. While there are no catalysts to make this stock head higher in a meaningful way, it seems unlikely the price will go much lower, unless there is a double dip recession.

While there is no such thing as a safe harbor in the stock market, some stocks usually hold up better than others. They're the ones that offer basics, like utilities. Everyone has to keep their lights on and their water running.

- Company Web site: www.avistacorp.com

- Ted Allrich