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 21, 2011 - The Washington Post Company (WPO-NYSE), together with its subsidiaries, operates as a diversified education and media company in the United States and internationally. The company provides a range of educational services, including higher education, professional training, test preparation, and K-12 learning services for individuals, schools, and businesses.

It also offers cable services consisting of basic video, digital video, high-speed data, and telephone services in 19 midwestern, western, and southern states of the United States. In addition, the company publishes and distributes The Washington Post, a morning daily and Sunday newspaper; and weekly publications and tabloids, as well as engages in commercial printing activities.

Further, it produces washingtonpost.com, which features news and information products; and other Web sites and online magazines. Additionally, the company owns six VHF television stations serving Houston, Detroit, Miami, Orlando, San Antonio, and Jacksonville television markets. The Washington Post Company was founded in 1877 and is based in Washington, the District of Columbia.

This is one of Warren Buffett's favorites (he owns 21.7% of the stock, first bought back in 1973). He was on the board of directors for almost 37 years. He shows no sign of selling. In fact, he's on record as saying: I will never sell a share of the Post. Of course, he says that about most of his stocks since his investing philosophy is to hold stocks forever. He still advises the board whenever they feel like calling.

Having one of the best investors of all time as a major holder, WPO should be of interest to most investors, and particularly conservative ones. What does the future look like for this rather parochial paper (serves the Washington, D.C. area without much reach beyond....has about 556,500 subscribers)? Here's what we know.

Further hurting results for the quarter was lower enrollment for Kaplan educational offerings. Final tally: third quarter loss of $6.2 million or 82 cents a share Last year, third period results were $60.9 million or positive $6.48 a share. Analysts thought the period would show a positive $3.85. Revenues did beat estimates: they were $1.03 billion vs expected $1. billion. The biggest surprise: the lower demand for Kaplan services. There was a hit from federal regulations on student loans that especially hurt for-profit colleges like Kaplan. The new regulations are meant to prevent students taking on a big debt for an education at a for-profit college that doesn't prepare for any meaningful career. New enrollments at Kaplan's colleges fell by 30% in the third quarter. Revenue was down 33% in the quarter and 27% for the year.

So where' the good news? It's in the broadcasting and cable television group. Ad revenues aren't surging but they're holding up well. Expect much better numbers as political campaigns grow and increase their presence through TV ads. Also helping is a continuing share buyback program that was recently re-authorized.

Additional measures management is taking: tighter expense controls and higher productivity. There could also be more sales of assets. Last year, Newsweek magazine, with all its debt, was sold. In July, the company sold Kaplan Virtual Education. There may be more of that group for sale. But management has also been busy buying other educational firms, ones that will enhance its international offerings.

The most likely driver of better results will be technology. The company is investing in its digital products to gain more market share and open new revenue sources. In October, it launched a new application for the latest Android cell phone. Additional mobile apps are coming.

The stock reflects a lot of the bad news (maybe all of it). Trading near a decades low level of $345 (it hit $308 earlier this year), investors have lost faith that management can turn this once favored stock. It traded at $999.50 in 2004. While the company transitions between print and digital, it has a solid balance sheet (debt is only 13% of total capital....and there's $632 million in cash). It carries a Financial Strength rating of A. The dividend yield of 2.7% also makes it rather attractive.

- Essential Numbers:
- Trailing P/E: 21
- Forward P/E: 21
- Price to sales ratio: .61
- Price to book: 1.04
- Operating margin: 7.67%
- Profit margin: 3.07%
- Return on equity: 4.64%
- Return on assets: 4.15%
- Revenues (last 12 months): $4.37 billion
- Total cash: $632 million
- Total cash per share: $81.88
- Total debt: $453.18 million
- Total debt to equity: 17.28%
- Current ratio: 1.18
- Book value per share: $334.13
- 52 week change: - 9.57%
- Shares Outstanding: 7.72 million
- Float: 4.68 million
- Held by insiders: 4.28%
- Held by insitutions: 99%
- Annual dividend: $9.40

Conservative investors with patience should be able to reap some reward in WPO and not just from its dividend which has gone up consistently. Management needs to continue the evolution into the digital age, lower expenses, and continue buying back stock. Combined, those three programs will ultimately increase earnings per share. And once that happens, the stock price usually follows.

- Company Web site: www.washingtonpostco.com

Ted Allrich