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 1, 2010 - Brown-Forman Corp. (BFB-NYSE) engages in the manufacture, bottling, import, export, and marketing of alcoholic beverage brands. It offers consumer beverage alcohol products, including Tennessee, Canadian, and Kentucky whiskeys; Kentucky bourbon; tequila; vodka; liqueurs; California sparkling wine; table wine; and ready-to-drink products.

The company sells directly to state governments, as well as through wholesale distributors. It exports to the United Kingdom, Australia, Mexico, Poland, Germany, France, Spain, Italy, South Africa, China, Japan, Canada, and the Russian Federation. Brown-Forman Corporation was founded in 1870 and is based in Louisville, Kentucky.

The recession doesn't seem to slow people's thirst. One might argue that it increases it. At least that's what the numbers suggest at BFB. Earnings continue ever higher. They've only gone down one year in the last 16 (in 2001 when they dropped by 3 cents to $1.33 a share). Since then, they've grown to $3.12 last year. This year, 12 analysts see $3.23, then $3.54 next year. Second quarter results (fiscal year ends April 30) analysts predict $1.00 a share (should be out in late November of early December). That compares to 99 cents last year. For the third quarter, expect 85 cents vs 80 cents last year in the third.

First quarter sales were a little below last year's first period ($569 million vs $571 million). Much of the decline came in the U.S. But sales were better in Australia and Spain, just not enough to cover the domestic slowdown. For the full year, expect $3.27 billion, a 1.4% increase over last year's $3.23 billion. Next year, look for $3.43 billion, up 4.90%. The bump for next year should come from a stronger global economy and better exposure in international markets.

Brown-Forman is offering customers different price options. It's also making new mixed drinks to meet the demand for more at-home social events, drinks like Southern Comfort Lime as well as the complete line of Jack Daniel's products. With the recession still lingering, more people are drinking at home than in restaurants or bars.

Management thinks it's a good time to introduce a new premium line of drinks. Maybe they see the end of the recession and want to be in the market with the right product when consumers begin to spend more. The company developed a new premium version of Jack Daniel's called Gentleman Jack. In the U.S., it recently started selling Candian Mist Black Diamond. These premium brands carry better margins, and many consumers prefer premium drinks no matter what the economy is doing.

There's an annual dividend of $1.20, up from $1.15 last year. In fact, the dividend has incresed every year since 1994 except in 2000 when it remained the same (at 50 cents a share). The yield is 2.00%. Last payment was made on September 30 with an ex-dividend date of September 2. That suggests the next payment will be on December 30 with an ex-dividend date early in that month.

More numbers: Trailing P/E is 20.58 while Forward P/E is 17.23. Price to sales is 3.60 and Price to book is 4.76. Book value is $12.77. Operating margin for the last 12 months was 28.51% and Profit margin was 17.79%. Return on Equity was very strong at 23.92% and Return on assets was 12.88%. Total Cash is $261.50 million or $1.79 per share. Total debt is $720.50 million. Debt to equity is .386. There are 146.18 million shares outstanding with a Float of 98.10 million. Insiders own 22.7% of the A shares and 4.1% of the B shares.

Conservative investors should like the solid balance sheet, the decent dividend and the high profitability. Many investors like the stock for those reasons. That's why the valuations are rather high. Still, if the economy has you spooked, this stock is one that should continue to deliver decent earnings even it takes a while for the recovery.

- Company Web site: www.brown-forman.com

- Ted Allrich