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 23, 2011 - Microsoft Corporation (MSFT-NASDAQ) develops, manufactures, licenses, and supports a range of software products and services for various computing devices worldwide. The company's Windows & Windows Live Division segment offers Windows operating system, Windows Live, and Internet Explorer. Windows operating system has Windows 7, Windows Vista, and Windows XP Home, as well as Windows Live suite of applications and Web services.

The company's Online Services Division offers online information products, such as Bing, MSN portals, and channels; and an online advertising platform for publishers and advertisers.

The Microsoft Business Division has Microsoft Office, Microsoft SharePoint, and Microsoft Dynamics ERP and CRM, as well as Microsoft Office Web Apps.

The company's Entertainment and Devices Division develops, produces, and markets the Xbox 360 platform; PC software games; online games and services; Mediaroom, an Internet protocol television software; Windows Phone and Windows Embedded device platforms; the Zune digital music and entertainment platform; and application software for Apple's Macintosh computers, Microsoft PC hardware products, and other devices. This segment is also in retail and marketing of packaged versions of the Microsoft Office system and the Windows operating systems. Microsoft was founded in 1975 and is headquartered in Redmond, Washington.

Microsoft just made a big buy, subject to regulatory approval: Skype Global, the Internet communications software firm. Paid $8.5 billion for it. That expands the company's presence in real-time communications. Up until now, Skype has been successful in most ways except profitability. The company has had trouble monetizing its popularity. Maybe under MSFT's management, that will noticably change. For $8.5 billion, you can be sure Mr. Ballmer and associates believe so. No matter how this develops, expect margins to be squeezed as the telecommunications arena is very competitive and since MSFT has almost a monopoly in software, profit margins can't be sustained when the two mesh.

Until that happens, profits look just fine. For 2010, they finished at $2.10 a share, up from $1.62 in 2009 (fiscal year ends in June). This year, 32 analysts have a consensus estimate of $2.58 (up almost 23%), then expect $2.77 in 2012 (another increase but at a smaller rate: 7.4%). For the March quarter, the company reported 61 cents compared to 45 cents last year in the third. For the fourth period, analysts see 58 cents vs 51 cents last year in the fourth.

There's a decent dividend at this once hot growth company. The payout is 64 cents for a yield of 2.6%. In the last 4 years, the dividend was 41 cents, 46 cents, 52 cents, and 58 cents respectively. With over $50 billion in cash, paying the dividend is not a concern.

Essential numbers: Trailing P/E is 9.62 and Forward P/E is 8.75. Price to sales ratio is 3.01. Price to book is 3.86. Operating margin for the last 12 months was 40.10% and Profit margin is 31.76%. Return on equity is a remarkable 43.96% and Return on assets was 18.63%. Total cash per share is $5.78. Total debt is $13.16 billion. Debt to equity is 24.63%. Current ratio is 2.76. Book value per share is $6.34. Beta is .97. In the last 52 weeks, the stock is down 8.76%. There are 8.43 billion shares Outstanding with a Float of 7.46 billion. Insiders own 10.91%. Institutions have 64% of the Float. Financial strength is rated A++.

Investors will need some patience with MSFT. While the downside risk at these levels appears minimal (a P/E of 9 seems almost surreal for this stock that once carried a P/E over 100), there is no immediate catalyst for bumping the stock higher. There are no new products scheduled soon. Integration of Skype, if approved by the regulators, will take time, and if successful, MSFT will have to figure out a way to get a good return on its investment. Conservative investors will be rewarded with an ever increasing dividend as they wait, but it could take 2 or 3 years before this stock moves in a meaningful way.

- Company Web site: www.microsoft.com

- Ted Allrich