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.

November 29, 2010 - Varian Medical Systems, Inc. (VAR-NYSE) together with its subsidiaries, provides cancer therapy systems and X-ray products worldwide. The company's Oncology Systems segment designs, manufacturers, sells, and services hardware and software products for treating cancer. Its product line includes linear accelerators, brachytherapy afterloaders, treatment simulation, verification equipment, and accessories; as well as information management, treatment planning, and image processing software. This segment serves university research and community hospitals, private and governmental institutions, healthcare agencies, physicians' offices, and cancer care clinics.

The company also designs, manufactures, sells, and services Linatron x-ray accelerators, imaging processing software, and image detection products for security and inspection purposes, such as cargo screening at ports and borders, and nondestructive examination in various applications. In addition, it develops products and systems for delivering proton therapy; and technologies in the areas of digital X-ray imaging technology, volumetric and functional imaging, improved X-ray sources, and technology for security and cargo screening applications.

The company was formerly known as Varian Associates, Inc. and changed its name to Varian Medical Systems, Inc. in April 1999. Varian Medical Systems, Inc. was founded in 1948 and is headquartered in Palo Alto, California.

Varian has not only survived the recent economic recession, it's thrived. Earnings continue to rise, going from $1.83 in 2007 to $2.31 in '08, then $2.65 in '09. In 2010 (fiscal year ends October 1), they went to $2.96. This year, 11 analysts see $3.35 as a consensus estimate, then $3.80 next year. Over the last 5 years, earnings had an average annual gain of 15.02%. Analysts think the next 5 will yield increasing results of 13.77% annually. Sales went from $1.777 billion in 2006 to $2.357 billion last year. This year, analysts think they'll be $2.59 billion, then $2.81 billion next year.

Varian has several opportunities to deliver accelerated earnings. One is higher demand for flat panels; another is international growth; yet another is converting a large backlog of $2.2 billion in orders. The company can also increase its share buyback program with its ample cash position.

Two products are doing better than anticipated. The first, TrueBeam, is a system designed to optimize both radiotherapy and radiosurgery which can be used to manage cancer anywhere in the body. In the third quarter (the first time it was offered) there were orders for 45 of the system. In the fourth, there were 60, and finally they reached a total of 125 for 2010. Analysts see orders accelerating in the future. The second product, RapidArc, is a radiotherapy technology, used to treat cancer. It delivers powerful and precise tumor-destroying radiation in a treatment that takes less than 2 minutes a day. Orders for this system have reached 1200 since it was introduced 2 years ago.

More numbers: Trailing P/E is 22.48 while Forward P/E is 17.19. Price to sales ratio is 3.31. Price to book is 6.11. Book value is $10.72. Operating margin was 22.67% in the last 12 months and Proft margin was 15.29%. Return on equity was 28.41%. Return on assets was 14.42%. Total cash is $520.2 million for $4.37 cash per share. Total debt is $43.38 million for a Debt to equity ratio of .03. Current ratio is 1.86. There are 119 million shares outstanding. Insiders own .41%. Institutions own 91.6%. There is no dividend. Financial Strength is A+.

Varian Medical Systems' stock has been mostly on an upward trajectory since early 2009 when it hit a low of $27.10. Earnings powered the higher numbers. Now the stock is trading at an all-time high and some of the valuations are getting stretched. While the future looks very bright for VAR, some caution may be warranted, especially if hospital spending begins to slow.

This stock is definitely one that Conservative investors will find interesting. The strong balance sheet with lots of cash and little debt, is a good beginning for further investigation.

- Company Web site: www.varian.com

- Ted Allrich