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.

July 25, 2011 - Sanofi-aventis (SNY-NYSE) engages in the discovery, development, and distribution of therapeutic solutions to improve the lives of everyone. The company offers a range of healthcare products, including a broad-based portfolio in prescription drugs, OTC/OTX, generics, vaccines, and animal health.

Patents are expiring at Sanofi, and generic drugs are taking market share. In the first quarter, sales for drugs competing with generics were $1.3 billion. Those same drugs generated $2.7 billion in 2009 in the first period. For 2010, they brought in $2.0 billion in the first quarter. But management isn't just watching revenues slide. It's out buying other drug companies to staunch the flow, mostly in the over the counter healthcare sector (Chattem was purchased in late 2009) and animal health (SNY bought Merial in mid-2009). It bought Genzyme for $20 billion in April of this year.

The main areas of therapeutics for SNY are diabetes treated with its drug Lantus, thrombosis treated with Plavix and Lovenox, cardiovascular treated with Aproval and Multaq, and cancer treated with Taxotera. It makes 20 vaccines. In 2010, 87% of sales came from pharmaceuticals and consumer health products, 13% from vaccines. It's Europe's largest drug company and fifth largest in the world.

Sales were slower in 2010, dipping to $40.28 billion. But with the acquisition of Genzyme, analysts see a 24.80% increase this year to $50.26 billion, then forecast $52.23 billion for 2012. Genzyme has a multiple sclerosis drug in Phase III trials, Lemtrada, that will boost sales if it gets approved.

Earnings also dipped in 2010, to $4.68. This year, 3 analysts have a consensus estimate of $4.88 and see only $4.48 for 2012. The range for 2012 is $4.08 to $4.94 so clearly it isn't easy to forecast earnings when a stock depends on new drugs to replace old ones. Through the end of 2011, SNY has 5 drugs it will submit for regulatory approval which would sell in 2012. Also contributing will be the full production of Cerazyme and Fabrazyme which had manfacuring problems that are now fixed.

Management is cutting costs, looking to save $2.7 billion by the end of 2011 compared to 2008 expenses. That should contribute 50 cents a share per ADR (American Depository Receipt) which is what American investors buy.

Essential numbers: Trailing P/E is 14.2 while Forward P/E is 8.5. Price to sales ratio is 2.26. Price to book is 1.36. Book value is $28.79 Opearating margin for the last 52 weeks was 24.08% and Profit margin was 15.57%. Total cash is $9.18 billion for $3.52 a share. Total debt is $11.69 billion. In the last 52 weeks, the stock is up 28%. There are 2.61 billion shares Outstanding with a Float of 2.34 billion. An annual dividend of $1.763 was paid in June. That was up from $1.465 paid in June of last year. The dividend is paid only once a year.

Conservative investors will worry about the constant siege from generic competition. But management, so far, has been handling it well, cutting costs and buying new companies and/or developing new drugs. That's the nature of pharmaceuticals these days: evolve or die. SNY continues to evolve and reward shareholders as it does.

- Company Web site: www.sanofi.com

- Ted Allrich