4 Companies Swimming In Cash : ABT, MDT, MO, PM, RAI

As the equity markets have run roughshod over debt-laden companies in the month of August, investors have been sent running for cover. Traditional safe haven plays such as gold and Treasuries have prospered as a result. For investors looking to wade back into stocks, here are four names that are rich in cash and have margins of safety to weather the storm.

Still on Fire
While the S&P 500 has shed 11.4% of its value in the month of August, the tobacco company Altria (NYSE:MO) has actually seen a slight uptick in its stock price. There is plenty to like about the company which split from Philip Morris International (NYSE:PM) back in 2008.

Altria recently reaffirmed its full-year guidance as it reported a Q2 in which its adjusted EPS rose 6.0% from the prior year quarter. For its trailing 12 months, it has generated operating cash flow of just under $3 billion and has been using the cash to reward shareholders. Altria repurchased more than $600 million worth of its common stock in Q2 and its current dividend yield is 6%.

Shares of competitor Reynolds American (NYSE:RAI) have managed a positive return of 5.9% in August as the company has an impressive cash position of its own. A favorable pricing environment enabled the company to more than offset the cigarette volume declines it suffered in Q2.

With the exception of a one-time settlement, Reynolds American generated more than $800 million in cash from its operating activities in Q2 and ended the quarter with $1.3 billion in cash. The 5.8% dividend yield of this stock is also attractive to income-oriented investors.

Healthy Diagnosis
The medical device maker Abbott Laboratories (NYSE:ABT) has cranked out $9.4 billion in operating cash flow over the past 12 months and its net sales in Q2 rose 9.0% from a year ago. The company has benefitted from double-digit growth from its international nutritionals business segment.

Shares of Abbott have been stable and have been flat in August. The company recently announced the payment of its 350th consecutive quarterly dividend payment dating back to 1924. The 3.8% dividend yield that shares of ABT wield is as safe as dividends come.

Medtronic (NYSE:MDT) is another company in the medical device field with monster cash flows. Over the trailing 12 months, it has generated $3.7 billion in operating cash flow. The company's cardiac and vascular business is coming off of a fiscal Q1 in which its revenue from emerging markets spiked 30% on a year-over-year basis. Medtronic also boasts a healthy dividend yield of 2.8%.

The Bottom Line
Most asset classes have taken a relentless pounding in August. However, investors should take solace in knowing that there are companies capable of weathering the challenging conditions that have surfaced. Those that have demonstrated the ability to generate robust cash flows have been able to outperform the market and protect their shareholders. There is no telling for how long these four stocks will continue to beat the market, but their ample stockpiles of cash provide sturdy backstops for stormy situations.