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.

January 30, 2012 - Kraft Foods Inc., (KFT-NYSE) together with its subsidiaries, manufactures and markets packaged food products worldwide. The company offers biscuits, including cookies, crackers, and salted snacks; confectionery products, such as chocolate, gum, and candy; beverages comprising coffee, packaged juice drinks, and powdered beverages; cheese products, including natural, processed, and cream cheeses; grocery items consisting of spoonable and pourable dressings, condiments, and desserts; and convenient meals, which comprise processed meats, packaged dinners, and lunch combinations.

The company sells to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores, and retail food stores. Kraft Foods Inc. was founded in 2000 and is based in Northfield, Illinois.

Kraft is on a roll, and I don't mean the kind that's served hot from the oven. While certain commodity costs are rising and consumers are still staggering from a weak economy, Kraft keeps delivering solid numbers.

In 2008, earnings were $1.88, then went to $2.03. In 2010, they were flat at $2.02. Nineteen analysts think 2011 finished with $2.28 and see $2.52 in 2012. They also forecast fourth quarter of last year finished at 57 cents a share well above the 46 cents registered in the last quarter of 2010. Sales have gone from $42.777 billion in 2008, dipped to $40.386 billion in '09, to $49.207 billion in '10. Analysts expect 2011 finished with $54.4 billion, then hit $55.79 billion this year.

Third quarter organic sales were up by 8.4%, well ahead of what Wall Street predicted. With higher advertising budgets and new products, analysts see Kraft able to raise prices without losing market share in more mature markets. Furthermore, its international presence is expanding, thanks to foreign acquisitions like Lu in France and Cadbury in England. With established distribution channels, they open countries like Brazil, India, China and Russia as well as emerging nations.

Those rising commodity prices mentioned above are a concern, though that trend is waning slightly. Management is cutting overhead to get costs more in line with revenues, to get its North American headquarter staffing better suited to the times. It's also getting a benefit from the Cadbury acquisition (made in February of 2010) as the two companies merge and cost savings of $200 million are expected as it consolidates distribution networks.

Two attributes conservative investors should like about KFT are its dividend yield (3%) and its Financial Strength: A+. The yield comes from a dividend that hasn't changed in 3 years and takes about 50% of earnings to pay. That 3% is well above the S&P 500 average of 2.1% and way ahead of most CDs.

- Essential Numbers:
- P/E: 20.83
- Forward P/E: 15.15
- Price to sales: 1.27
- Price to book: 1.88
- Operating margin: 13.24%
- Profit margin: 6.06%
- Return on equity: 9.07%
- Return on assets: 4.67%
- Total cash: $2.06 billion
- Cash per share: $1.17]
- Total debt: $29.56 billion
- Total debt to equity: 81%
- Current ratio: .85
- Book value per share: $20.71
- 52 week change: 25.84%
- Shares outstanding: 1.77 billion
- Float: 1.67 billion
- Held by insiders: .06%
- Held by institutions: 74.8%

Kraft's stock has been one of the safer harbors in the market turmoil of the last 3 years. While it dipped, along with all of the market in early 2009, it's been relatively flat for the last 2 years and is beginning to move higher, in anticipation of the split. Conservative investors will like what they find if they keep digging into KFT.

- Company Web site: www.kraft.com

ed Allrich