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.

DNP has a good yield with its 46 cents a share dividend. But that isn't the whole story. Since 2008, capital distributions have added to an investor's total return. For 2008, total pay out was 78 cents, in 2009, 78 cents, and last year, 78 cents. There's definitely a pattern here. While investors can't be sure capital gains will again add significantly to total returns this year, there's a good possibility there will be a capital distribution once again.

Another positive about DNP: it pays monthly. So investors looking for a check 12 times a year instead of the usual 4 times for dividend paying stocks will find better cash flow with DNP.

There is one red flag that has to be waved: the premium on DNP is significant. Currently investors are paying 25% over the Net Asset Value. That means for every $1 of investments in the portfolio, an investor is paying $1.25. That premium may go back to zero or even negative. In the past, it ranged from negative 7% in 2008 (the only discount to NAV in 15 years) to a high of positive 40% in 2003. In the last 2 years, it was positive 24% and 22% respectively.

Stock and bond markets firmed in the first part of the year as investors put the recession in the rear view mirror and started moving money back into the capital markets. One of the areas to benefit was Utilities. Prices rose as investors sought yield and some safety. That meant better returns for DNP. In fact, for the first period, the fund had a total return of 6.2%.

Now investor psychology has changed as housing hasn't improved, unemployment is still high, and global financial stress continues. That may mean even better times for DNP as investors look for defensive shelter in the current storm. Utilities usually afford a somewhat safe harbor. That suggests DNP's price should hold at these levels or go higher for several quarters.

The concern in the utility sector at the moment is nuclear, as in nuclear energy. After the Japanese tragedy, many companies (and countries) are cutting back or eliminating nuclear energy as a resource. They're turning to gas, and particularly natural gas or shale gas since both are in abundant supply. Many of the companies that DNP holds are more invested in gas which should bode well as other utilities close down their nuclear plants, raising costs temporarily and lowering revenues in their futures.

Essential numbers: Market Cap for the fund is $2.41 billion. Trailing P/E is 9.9. Price to book is 1.25. For the last 12 months, Return on equity was 12.65%. Beta is a very low .46 which means little volatility in the last year. There are 238.78 million shares Outstanding.

Income investors should like this story. Management has consistently delivered good returns over the last several years. This year looks like another positive one. Just keep an eye on the premium to Net Asset Value. It's fairly high now and seeing it go much higher would seem more like a hope than a reality.

- Company Web site: www.dnpselectincome.com