Income is a big part of investors' returns. Stocks, mutual funds and fixed income ideas in this column are featured because they are relatively solid in their ability to pay dividends or interest. We're giving income investors a resource to start their research for investments that give better yields with lower risk.

March 23, 2011 - Consolidated Communications Holdings, Inc. (CNSL-NASDAQ) through its subsidiaries, provides communications services to residential and business customers in Illinois, Texas, and Pennsylvania. It offers a range of telecommunications services, including local and long distance service, custom calling features, private line services, dial-up and high-speed broadband Internet access, digital television services, carrier access services, Internet protocol digital television (IPTV), network capacity services over its regional fiber optic network, directory publishing, and competitive local exchange carriers (CLEC) calling services.

Business customers include small retail, commercial, light manufacturing, and service industry accounts, as well as universities and hospitals. As of December 31, 2009, it had approximately 247,235 local access lines; 72,681 CLEC access line equivalents; 100,122 digital subscriber lines; and 23,127 IPTV subscribers. The company was founded in 1894 and is headquartered in Mattoon, Illinois.

Earnings will be down a little this year, going to 84 cents from 94 cents, if 7 analysts are correct in their consensus estimate. The company is still adjusting to the loss of its CMR and Operator Services businesses. Also, wireless communications are becoming more the norm, and this wireline provider hasn't been moving as quickly as most to get in to that sphere. There's also more competition from cable operators. And the economy hasn't really shown that it's back to full health.

Look for better numbers next year, but not by much. 7 analysts have a consesnus estimate of 85 cents, only a penny higher. But they are higher. And the range goes from 58 cents to $1.09 so if the best number is hit, that's a great improvement, one more likely if the economy gains real traction sooner rather than later.

There are reasons to believe better numbers are coming. Revenues from data, Internet and video continue to improve. More subscribers are signing up for DSL and IPTV services. Bundled services are getting more popular as customers order the Triple Play, made up of local phone service, DSL and IPTV. Fees are going up as well for video on demand and faster DSL speeds. In addition, management is cutting costs to help bolster the bottom line.

The company's cash flow should cover the dividend without much strain. The payout has been $1.55 since 2006, even in 2008 when earnings were only 18 cents a share. Currently the dividend is 142% of earnings. Next payment is on April 30 for holders of record on April 13.

Essential numbers: Market Cap is $554.75 million. Trailing P/E is 17 while Forward P/E is 21. Price to sales ratio is 1.43. Price to book is 8.2. Book value is $2.25. Operating margin for the last 12 months was 17.19% while Profit margin was 8.5%. Return on equity was an extraordinary 43.45%. Return on assets was 3.38%. Revenues were $383.7 million. Total cash is $67.67 million for $2.27 a share. Total debt is $912.25 million. Total Debt to equity is 1269%. Current ratio is 1.8. Beta is .97. The stock is down 2.89% in the last year. 52-week high was $19.50, the low $16.31. There are 29.76 million shares Outstanding with a Float of 24.85 million. Insiders own 16.73% and Insituttions have 45.40% of the Float.

This stock has traded in a narrow range over the last 18 months, between $16 and $19.50. There's no reason to believe it will move up quickly. There are no catalysts waiting in the wings. But for Income Investors, this stock will generate a well above average payout and give some sense of comfort through a turbulent market. While it's leveraged a little too much for many investors, it's the large debt position that helped make that exceptional Return on Equity.