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.

Gladstone had a real dip in earnings in 2008, going to negative $1.08 after reporting positive $1.13 in '07. In '09, it got back to black with 18 cents, followed by 78 cents last year. This year, look for 87 cents (fiscal year ends September 30). Next year, 4 analysts have a consensus estimate of 91 cents a share.

So much of GLAD's prosperity depends on the bond market and yields from their investments. But there's another level to GLAD's holdings: they're private issues, meaning there is no public market for them. They're not easily sold. And they're not easily evaluated. Of course, there are comparable issues publicly traded but the rubber never really meets the road until you try to sell them. Then, the price you thought they were worth will often disappear like champagne at a wedding. Usually the price finally realized on private bonds is lower than their value as held on the books. Not always, but many times.

That means GLAD's portfolio can fluctuate dramatically. And what they are showing to be worth are not necessarily what they will ultimately be sold for, if they are sold. This year, with interest rates low, the portfolio should have benefited.

Third period results were encouraging. Net interest income (NII), the difference between what the company pays for money and what it receives in interest from the bonds it holds or loans its made, improved to $4.5 million, up from $4.4 million in the same period last year. For the nine months period, NII was $13.6 million, a small improvement over the $13.3 million in last year's same time frame.

Income investors will like this aspect of GLAD: it pays dividends monthly. Currently that's 7 cents every 30 days. Payment is made at the end of each month. For the year, look for 84 cents for that tempting yield of 11.1%. In 2007 and 2008, payout was $1.68, then dropped to $1.05 last year. Dividends take about 96% of earnings. The next payout will be September 29 for holders of record of September 20 (ex-div date).

The company is currently looking to take out its short term credit of $127 million and replace it with long term financing, that way it can match its long term loans. Still, those long term loans are mostly floating rate. That means if the company can fix some of its long term financing, and inflation returns, the NII wil widen as rates move higher. However, most of the long-term borrowing will most likely be floating rate in order to minimize interest rate risk.

With banks reluctant to lend to small and medium sized businesses, there is robust demand for Gladstone's money. That also means terms are more favorable to the company. Still, if the economy stalls again and more businesses fold, it won't matter what the terms are.

Essential numbers: Market Cap is $162.7 million. Forward P/E is 8.5. Price to sales ratio is 4.73. Price to book is .72. Operating margin for the last 12 months was 64.53%. Return on equity was -7.18%. Revenues for the last 12 months were $33.34 million. Total cash is $7.78 million for 37 cents a share. Total debt is $92.07 million. Total debt to equity is 42.61%. Current ratio is .14. Book value per share is $10.34. Beta is 1.49. In the last 52 weeks, the stock is down 30.84%. There are 21.04 million shares Outstanding. Insiders own 6.31%. Institutions have 36.07%.

Risk takers only need consider Gladstone. It's still very small. It has very illiquid positions. The economy needs to recover stronger than it is currently for a chance to improve earnings. But there is a good dividend for those who want to risk it as they wait for, hopefully, better times.