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.

September 23, 2008 - GlaxoSmithKline plc (GSK-NYSE) together with its subsidiaries, engages in the creation, discovery, development, manufacture, and marketing of pharmaceutical products, over the counter (OTC) medicines, and health related consumer products. The company offers prescription medicines to treat a range of conditions, such as infections, depression, skin conditions, asthma, heart and circulatory disease, and cancer. It also markets approximately 25 vaccines to prevent life-threatening or crippling illnesses, such as hepatitis A, hepatitis B, diphtheria, tetanus, whooping cough, measles, mumps, rubella, polio, typhoid, influenza, and bacterial meningitis.

Its oral healthcare products primarily comprise a range of Aquafresh toothpastes , toothbrushes, and mouthwashes; a range of Sensodyne toothpastes and toothbrushes, including Pronamel to protect from acid erosion; Biotene, a treatment for dry mouth; and Polident, PoliGrip, and Corega, which are denture care cleansers and adhesives. Further, the company provides nutritional healthcare products, such as Lucozade, a range of energy and sports drinks; Horlicks, a range of milk-based malted food and chocolate drinks; and Ribena, a blackcurrant juice-based drink.

GlaxoSmithKline operates in Europe, North America, Central and South America, the Caribbean, Asia, Australia, the Middle East, Africa, and Southeast Asia. The company was founded in 1935 and is based in Brentford, the United Kingdom.

The company is well known for Advair, a respiratory formula. It's going off patent in 2011. Investors are worried. However, several layers of patent protection for the inhaler will soften the decline and probably see sales decrease gradually over 3 to 5 years rather than slammed next year. It currently represents about 5% of GSK sales. A number of new drugs in the pipeline should be able to replace the loss of Advair by 2015.

The last few years haven't been kind to sales at GSK but after a 1 year falter in earnings, the damage has been minimal. While revenues went from $45.432 billion in 2007, they slipped a little in 2008 to $45.051 billion, then further to $44.254 billion. This year, analysts see
$43.15 billion, then $42.81 billion in 2011.

Earnings on the other hand appear to be improving. Consensus from 3 analysts is for $3.82 this year, up from $3.38 last year, then $3.97 in 2011. Next earnings release will be on April 28 for first quarter results. Expectations are for 75 cents.

In order to keep margins high, the company will most likely use some or most of its large cash position to buy a biotech company with an advanced pipeline of promising remedies or a generic drug company. Cash in the bank is $11.177 billion. Plus the company carries an A+ rating from Value Line so borrowing is always available. The company has about 60% of capital in loans already.

Another nice feature of the stock: the dividend is $2.29, up from $1.92 last year. Analysts forecast dividend growth of 3.5% a year. The yield is 5.80%.

More numbers: Forward P/E is 9.88. Price to sales ratio is 2.30. Price to book is 26.13. Book value is $1.51. Operating margin for the last 12 months was 32.12% while Profit margin was 19.50. Return on equity was an astounding 61.68%. Cash per share is $4.13. Total debt is $24.97 billion. Current ratio is 1.45. There are 2.595 billion ADR's (American Depository Receipts) which are equivalent to 5.190 billion total shares. Each ADR represents 2 common shares. Institutions own 8.5% of the stock.

Conservative investors will find a lot to like in GSK, chief among them the high cash position, the extremely strong return on equity, and the solid dividend. Margins are getting pressured, however. And Advair can't keep selling as much as it once did, given the patent expiration dates and new competition trying to enter the field (though developing a new respiratory medicine is extremely difficult).

- Company Web site: www.gsk.com

- Ted Allrich