As much as Marvel Entertainment's (NYSE:MVL) movie business impresses me, its publishing business impresses me more. And that's not just because of my wild-eyed fascination with comics. Marvel editor-in-chief Joe Quesada, who gave me an hour-long tour of his operation, convinced me.

How? When I asked him how the work of making readable comics fit with the firm's flashier movie business, he said plainly, "We're the R&D for the company."

Not your typical R&D
Brilliant response. And it made me wonder why in the heck I hadn't thought of that. Now, with the advantage of time, I know. Tech guys like me have always viewed R&D as an expense that has no hope of an immediate return.

Not so with Marvel's publishing group, which is responsible for the care and feeding of some 4,000 characters. Have a look at how the business has improved with time:









Year-Over-Year Growth




Operating Margin




Source: Marvel press releases and SEC filings

That's higher sales matched with relatively stable margins, which is exactly the combination we Foolish investors seek. And, again, it's nothing like a classically unprofitable R&D operation.

Not that any of us should be surprised. Marvel controls close to 40% of the dollar value of the comics market. That's important, because comics still draw a wide readership. Consider the 2006 Comic-Con International, which drew an estimated 100,000 attendees to San Diego over four days.

Why the crowd? Maybe it's because comics have entered the popular culture in unexpected ways. For example, hit TV show The O.C. prominently features comics through one of its star characters, who also happens to be a talented comic book artist.

Or maybe, as Quesada told me, it's because Marvel's books are best when they reflect the real world. That's what happened with its Civil War mini-series, in which an accident that kills hundreds raises questions over whether superheroes ought to register their powers with the federal government. Popular characters align on different sides of the issue, hence the title of the series.

Where synergy meets strategy
And these themes take shape well in advance, Quesada says. Marvel is already mapping out the major plotlines for its characters for 2008. Writers are a huge part of the process. Marvel brings its top creators to its N.Y. headquarters at least twice annually to discuss ideas.

Does that also feed the movie slate? No, says Quesada. "We've never had a situation where Marvel Studios has said they want us to come up with a storyline that would work for a movie."

But there's more to that than creative control, Quesada says. It's also good for business. Marvel's publishing unit has a burgeoning trade paperback business in which previously published comics are collected into a book ahead of a major film release. Ghost Rider had one made in 2005, for example. So did Fantastic Four.

That way, Quesada says, readers can catch up with the history of the characters before seeing the films being made by Sony (NYSE:SNE) and News Corp.'s (NYSE:NWS) 20th Century Fox. Marvel, meanwhile, enjoys heady margins on the best work of its creators.

That's a far cry from the early 1990s, when Marvel vice president Matt Finick says that the per-book volumes were 10 times higher than they are today. But that was also a bubble. Comics I still own from those days don't carry much value from collectors because there are so many available.

Old isn't new again
In the end, that's a good thing. Marvel under Quesada and publisher Dan Buckley, who Quesada calls a genius, seems to have figured out how to create a consistently profitable publishing division that is feeding movie ideas to its West Coast studio, which is currently in the throes of producing Iron Man and The Incredible Hulk.

But I'll still lament the past. On my way out of Marvel, I passed what used to be the famed bullpen, where geniuses like Lee, Kirby, Ditko, Romita, Byrne, Claremont, and too many others to mention used to write, draw, and ink the stories of Marvel's mighty cast. Once filled with pens and drawing tables, that area is now a cubicled sea of computers ready to render what fills today's comics.

And that, too, is probably a good thing for investors wondering if this stock can still save their portfolios. So long as Marvel doesn't lose its edge -- or its spirit.

David Gardner saw the potential of Marvel years before the market caught on, and he recommended it to subscribers of the Motley Fool Stock Advisor newsletter. Click here to get 30 days of free access to the newsletter service's entire portfolio, which is beating the market by more than 41%.

Fool contributor Tim Beyers, who is ranked 1,234 out of more than 23,500 in our Motley Fool CAPS investor-intelligence database, enjoyed his visit to Marvel about as much as any interview he's ever done. Tim didn't own stock in any of the companies mentioned in this story at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on superhero movies, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy is a hero to your portfolio.