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 8, 2010 - Dollar Tree, Inc. (DLTR-NASDAQ) operates discount variety stores in the United States and Canada. All merchandise sells for $1.00 in the U.S.. The company operates stores under the names of Dollar Tree, Deal$, and Dollar Bills.

The company operates 3,961 discount variety retail stores in 48 states and the District of Columbia. Dollar Tree, Inc. was founded in 1986 and is headquartered in Chesapeake, Virginia.

If you wondered where consumers went during these recessionary times, they were at Dollar Tree stores. Earnings grew over the last 4 years from $1.39 in 2007 to a projected $3.07 for this year (consensus estimate from 19 analysts). Next year, they see $3.50. Quarterly earnings (fiscal year ends in January) will be out in a few weeks. Expect 62 cents a share, up 21.6% from last year's 51 cents in the third period. For the final quarter, expectations are for $1.24 compared to $1.01 last year in the fourth.

Management believes total sales for the year will be between $5.77 billion and $5.86 billion because of single digit improvements in same store sales and a 6.5% increase in square footage. Last year's total was $5.23 billion. Traffic is up for most stores, and increased prices in discretionary items are boosting top and bottom lines. Consumables are also selling well.

Much of what Dollar Tree offers comes from China. Lately, labor costs are higher, but the company isn't feeling the pinch. It reduces the sizes of packages it sells to offset higher costs. It also adjusts the mix of inventory, changing about 50% of items each year. And if a price gets too high from one vendor, it gets another.

There's plenty of room for growth in the U.S. as well. Currnet store count is 3961 domestically. Management believes there's room for 7000. At a rate of 6% annual openings, it will take a little over 10 years to reach that level. That number doesn't include the Canadian company or Deal$ that DLTR owns. There are 160 Deal$ stores, and they can sell items for over $1.

More numbers: Trailing P/E is 19.91 while Forward P/E is 14.91. Operating margin for the last 12 months was 10.07% and Profit margin was 6.23%. Return on equity was a noteworthy 25.62% while Return on assets was 15.87%. Cash per share is $3.78. Total debt is $266.50 million. Total cash is $480 million. Debt to equity is .19. Current ratio is 2.57. Book value per share is $10.84. The stock is up 63% in the last 52 weeks. There are 126.96 million shares outstanding with a Float of 122.79 million. Insiders have 2.75% of the stock. Institutions own 94.70% of the Float. There is no dividend.

Conservative investors will find comfort here: lots of cash, little debt, strong earnings growth, expansion potential, capable management, high return on equity. All attributes that any investors would find attractive. But the stock has rallied in the last year well above average so any shortfall in earnings would not be well received.

- Company Web site: www.dollartree.com

- Ted Allrich