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.

May 16, 2011 - Mattel, Inc., (MAT-NYSE) together with its subsidiaries, engages in the design, manufacture, and marketing of various toy products worldwide. Its products include fashion dolls and accessories, vehicles and playsets, and games and puzzles.

It also publishes advice and activity books, as well as magazines including American Girl. The company sells directly to retailers, including discount and free-standing toy stores, chain stores, department stores, and other retail outlets; wholesalers; and distribution centers. It also markets through a catalogue, Web site, and agents and distributors. The company was founded in 1945 and is headquartered in El Segundo, California.

Mattel is more than Barbie dolls, but Barbie is still one of the main drivers in sales and profits. In the first quarter of this year, sales for the blonde bombshell were up 14%, the hottest she's been in 7 years. Barbie's ageless. But she wasn't the only contributor to better results: Monster High (where childredn of famous monsters rule the school) and Disney Princess moved off the shelves fast.

Numbers for the first quarter saw sales well above last year's first period ($951.9 million vs $880.1 million), but profits were hit by a litigation and legal settlement that took $26 million. Final numbers were 5 cents a share compared to7 cents in the first quarter of last year. For the June quarter, look for 16 cents a share vs 14 cents, then in the September quarter, estimates are for 85 cents compared to 77 cents. For the full year, 17 analysts have a consensus of $2.06 (with a range of $1.95 to $2.20), up from $1.86 in 2010. Next year, they see $2.28 (with a range fo $2.03 to $2.49).

Those numbers incorporate management's new effort to cut costs. It recently started a 2 year program committed to saving $150 million by the end of 2012. With ever increasing sales (revenue estimates are for a 6.30% rise to $6.23 billion this year, then another 2.9% to $6.41 billion next year), higher earnings seem almost assured.

There's more to that litigation and legal settlement mentioned above. For the last 7 years, the company has been in a battle with MGA Entertainment over the ownership rights to Bratz dolls, the little fashion dolls. In the latest legal judgment, Mattel was ordered to pay $88.5 million in damages. Punitive damages may come on top of this. Mattel intends to file a motion for a retrial. How much of the forecasted $150 million savings comes to fruition will partly depend on legal bills and payments for this endeavor.

On the bright side, there's a new CARS movie in the works, scheduled for release in June. Mattel has the rights to cars and toys that go with the movie. Expect a boost in those sales starting this summer. Also scheduled for release soon: a new series of animated shorts associated with Toy Story, the delightful, ongoing saga of Buzz Lightyear and Woody the cowboy. Another franchise starting up: The Green Lantern. The movie is opening now, and Mattel will sell action figures, games, cars and collector products based on the comic book hero.

Essential numbers: Trailing P/E is 14.28 and Forward P/E is 11.60. Price to sales ratio is 1.56. Price to Book is 3.66. Book value is $7.25. Operating margin for the last 12 months was 15.45% and Profit margin was 11.41%. Return on equity was a remarkable 26.47% and Return on assets was 12.07%. Total cash is $1.05 billion for $3.02 a share. Total debt is $1.20 billion. Total debt to equity is 47.67%. Current ratio is 2.65. Beta is 1.03. In the last 52 weeks the stock is higher by 20.85%. There are 347.59 million shares Outstanding with a Float of 346.23 million. Insiders own .36% of the stock while Institutions have 90.2%. The company has a Financial Strength rating of A.

Conservative investors will want to spend more time with Mattel, getting used to the idea that this is much more than a toy story. With a portfolio of action heroes, joint ventures with major movies, and plenty of games and toys, this is a company that has proven it can produce solid sales and earnings in tough times, then do even better when the economy grows.

- Company Web site: www.mattel.com

- Ted Allrich