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.

September 26, 2011 - Vectren Corporation (VVC-NYSE) provides energy delivery services to residential, commercial, and industrial and other customers in Indiana and west central Ohio. It provides natural gas distribution and transportation services in Indiana and west central Ohio; and electric distribution services primarily in southwestern Indiana.

In addition, the company provides gas marketing, gas portfolio optimization, and other portfolio and energy management services to municipalities, utilities, industrial operations, schools, and healthcare institutions located in the midwest and southeast United States.

Further, it mines and sells coal; and provides underground construction and repair, performance contracting, and renewable energy services, as well as invests in energy-related opportunities and services, real estate, and leveraged leases.

Vectren Corporation serves various industries, including automotive assembly, parts, and accessories; feed, flour, and grain processing; metal castings; aluminum products; appliance manufacturing; polycarbonate resin and plastic products; gypsum products; electrical equipment; metal specialties; glass; steel finishing; pharmaceutical and nutritional products; gasoline and oil products; and ethanol and coal mining. As of December 31, 2009, it supplied natural gas service to approximately 993,100 customers; and electric service to approximately 141,400 customers. The company was founded in 1912 and is headquartered in Evansville, Indiana.

If you're tired of the surges and drops of the stock market, then look closely at VVC. In the last 2 years, it traded in a range of $21.70 to $28.80. And it pays a dividend of $1.38 as you patiently wait out the current waves of hope and despair, for a yield of 5.2%. Nothing exciting here. Just solid earnings, an ever increasing dividend and some feeling of comfort in a volatile stock market.

Last year, earnings per share (EPS) finished at $1.64. Four anlaysts see 2011 EPS at $1.74 with a range of $1.70 to $1.80. For 2012, 5 analysts forecast $1.89 with a range of $1.82 to $2.00 a share. Next earnings announcement will be on November 3 for the third quarter. Expect 33 cents vs 20 cents last year in the third. For the fourth quarter, look for 71 cents compared to 56 cents in 2011's fourth.

Second quarter results were strong. Earnings were 18 cents a share, 50% ahead of estimates of 12 cents and well above last year's 11 cents in the second period. Revenues moved up by $73 million to $475.8 million. Earnings were helped by new, higher rates that more than compensated for increased maintenance costs created by scheduled shutdowns of several electric generating plants. The non-utility side of the business only posted a 1 cent loss for the quarter, a solid improvement over the 9 cents loss last year in the second period. Also helping EPS was the coal mining division. A negative was losses from ProLiance, the gas marketer of VVC.

Expect continued positive earnings from the utility group as higher rates should more than compensate for some growth in operating costs. Continued applications for more increases in rates will continue as the company invests in infrastructure and grows. Management is also focused on increasing efficiency through cost cutting. With coal in strong demand, look for more contributions from the coal mining division. The only negative is the depressed prices of gas which may further weaken the ProLiance contributions.

Essential numbers:
- Trailing P/E: 18; Forward P/E: 14
- Price to sales ratio: 1.01
- Price to book: 1.5
- Operating margin (last 12 months): 14.62%
- Profit margin: 5.66%
- Return on Equity: 8.48%
- Return on assets: 4.23%
- Total revenues (last 12 months): $2.15 billion'
- Total cash: $14.80 million
- Cash per share: 18 cents
- Total debt: $1.86 billion
- Total debt to equity: 128.89%
- Current ratio: .8
- Book value per share: $17.68
- Change in the last 52 weeks; 3.31%
- Shares Outstanding: 81.78 million
- Float: 80.90 million
- Insiders own: 1.57%
- Institutions have: 53.3% of the Float
- Dividend: $1.38; Yield: 5.2%
- Financial Strength: A

Conservative investors will find VVC worth their time to investigate. With earnings predicted to improve this year and again next year, a decent dividend yield, and a stock price that doesn't crash when the market does, this stock offers what most investors look for but rarely find.

- Company Web site: www.vectren.com

  Ted Allrich