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.

June 1, 2009 - FPL Group, Inc. (FPL-NYSE) through its subsidiaries, engages in the generation, transmission, distribution, and sale of electric energy. It produces electricity through natural gas, wind, nuclear, oil, hydro, and other resources. As of December 31, 2008, the company served approximately 4.5 million residential, commercial, and industrial customers in the east and lower west coasts of Florida.

Investors are pretty excited about FPL because it's one of the largest producers of energy by wind power. They've driven the stock to levels where the dividend yield is about 200 basis points (2%) below the average yield for all utilities (3.3% vs 5.2%). So this stock isn't cheap. But it has quite a bit of good going for it.

FPL currently generates about 6400 megawatts of wind power and has plans to add another 1000 megawatts in 2009, then another 1000 to 2000 mw next year. The business should benefit from tax credits that were part of the government's stimulus program. The law allows companies flexibility to choose when and how these credits are recorded. That should accelerate earnings and cash flow. It also gives more certainty to the business. FPL's earnings should move ahead nicely this year and next even with weaker sales.

Management has given earnings guidance of $4.20 to $4.40 a share for 2009, up from $3.84 in 2010. The consensus for 16 analysts is $4.21, then $4.75 in 2010. For the June quarter, look for 99 cents a share, up from 93 cents in the same period last year. In the September period, expect $1.49, well ahead of the $1.25 last year in the same quarter. In the last 5 years, average annual earnings advances were 9.5%. Over the next 5 years, analysts see average annual gains of 10%.

Sales grew by 10% a year, on average, in the last 5 years. Over the next 5, analysts forecast 5.5%. In 2006, they were $15.710 billion, then went down to $15.263 billion. Last year, the were up, to $16.410 billion. This year, analysts $16.5 billion (the range from 8 analysts is $13.54 billion to $18.90 billion). Next year, they predict $17.80 billion with a range of $14.85 billion to $20 billion.

FPL has two filings with the state's rate commission. The first is for a rate increase of $1 billion for 2010, then another $250 million in 2011. The decision is expected in December with the new rates taking effect in early 2010. The second filing is for permission to build a gas pipeline in eastern Florida. Estimates for the cost of the project run to $1.6 billion. It would send fuel to gas-fired generating plants, lowering the company's dependence on pipelines that pump gas from the Gulf of Mexico.

More numbers: Trailing P/E is 13. Forward P/E is 11.90. Price to Sales is 1.4. Price to Book is 1.94. For the last 12 months, Operating margin was 17.77% while Profit margin was 10.52%. Return on equity was a respectable 15.45%. Total debt is $17.04 billion. Long term interest earned ratio is 3.6. Current ratio is .78. Book Value per share is $29.21. There is a dividend of $1.89 for a yield of 3.3%.

As mentioned above, investors love this stock, one of the few domestic wind power investments, even though it isn't a pure wind power company. However, the stock took a mighty blow last October 10 when it hit the 52-week low of $33.81 but has bounced back strongly.

This stock should appeal to conservative investors because it has a decent dividend as well as some growth possibility. Value Line gives the company an A+ for Financial Strength. And with new wind power projects commencing, it's one of the few investments investors can make in this new energy resource.

Company Web site: www.fplgroup.com

- Ted Allrich