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.

August 16, 2010 - Pall Corp. (PLL-NYSE) manufactures and markets filtration, purification, and separation products and integrated systems solutions worldwide.

The company's Industrial segment (60% of '09 revenues) offers enabling and process enhancing technologies for various industries, such as aerospace, transportation, micro and consumer electronics, municipal and industrial water, fuels, chemicals, energy, and food and beverages. This segment also provides filters, coalescers, and integrated separation systems for hydraulic, fuel, and lubrication systems on mechanical equipment to various industries. In addition, it sells filtration and fluid monitoring equipment to the aerospace industry. Further, this division offers filtration and purification technologies for the semiconductor, data storage, fiber optic, advanced display, and materials markets, as well as a suite of contamination control solutions for chemical, gas, water, chemical mechanical polishing, and photolithography processes. The company was founded in 1946 and is based in Port Washington, New York.

Earnings took a step back in 2009, dipping to $1.64 from $1.76 in 2008. But this year, they look ready to bounce back. Consensus from 12 analysts is for $2.05 (range of $2.00 to $2.16), then next year advancing to $2.33 (with a range of $2.20 to $2.63). Fourth quarter and annual earnings are due in September (fiscal year ends July 31). Expect the last quarter to show 64 cents compared to 57 cents in last year's fourth. For first quarter 2011, look for 47 cents a share, up from 40 cents in this year's first.

Management is trimming interest expenses. In June, the company issued $375 million in debt, a 10 year senior note with a rate of 5%. About $280 million of it will be used to repay current senior notes that have a 6% interest rate which mature in 2012. That saves about $2.8 million a year in interest costs. The remaining portion of the new debt will be used for general corporate purposes. The new note is due in 2020. To further take advantage of low interest rates, the company recently negotiated a 5-year, $500 million revolving credit facility to replace one set to expire in June 2011. Debt is 36% of capital and interest coverage is 8.1 times. Value Line gives the company an A for Financial Strength.

Pall increased its dividend annually since 2004 when it was 36 cents a share. It progressed to 40 cents, 44 cents, 48 cents, 51 cents, 58 cents annually. This year, it will pay 64 cents and is expected to bump it to 68 cents next year.

More numbers: Trailing P/E is 16.42 but Forward P/E is 15.13. Price to sales ratio is 1.74. Price to book is 3.38. Book value is $10.48. Operating margin for the last 12 months was 15.19% with a Profit margin of 10.77%. Return on equity was 22.31% and Return on assets 8.13%. Total revenue was $2.38 billion. Total cash is $483.88 million for $4.15 a share. Total debt is $728.24 million. Current ratio is 2.80. There are 116.6 million shares outstanding with a Float of 116.47 million. Institutions own 90.30% of the stock.

Conservative investors should find this stock worthy of their time. It's a global company providing vital products for human safety. While revenues and earnings declined in 2009, the company seems to have corrected those areas contributing to the disappointment. Expect good earning this year and next unless the consumer gets hurt more and spends less or hospital budgets have to be cut. Also, if the dollar continues to strengthen, it will adversely affect sales.

- Company Web site: www.pall.com

- Ted Allrich