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 - Lockheed Martin Corp. (LMT-NYSE) engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the United States and internationally. The company also provides management, engineering, technical, scientific, logistic, and information services.

The Electronic Systems segment offers air and missile defense; tactical missiles; weapon fire control systems; surface ship and submarine combat systems; anti-submarine and undersea warfare systems; land, sea-based, and airborne radars; surveillance and reconnaissance systems; simulation and training systems; and integrated logistics and sustainment services.

The IS&GS segment provides federal services; information technology solutions; software and systems engineering support services; logistics, mission operations support, peacekeeping, and nation-building services for the various U.S. defense and civil government agencies.

The Space Systems segment produces government and commercial satellites; strategic and defensive missile systems, including missile defense technologies and systems, and fleet ballistic missiles; and space transportation systems. Lockheed Martin Corporation was founded in 1909 and is based in Bethesda, Maryland.

LMT was featured in this column exactly one year ago. It was selling at $85 at the time. It went to $87 but dropped as low as $67.80 late last year, then started an upward path. Can it keep going?

Earnings are always the key to better stock prices. So this year will be a challenge since earnings are expected to fall to $6.97 a share, according to 25 analysts. That's down from $7.26 last year. But next year, expect good things. Consensus estimate for 2012 is $8.56 a share with a range that goes from $7.09 to $9.68. If it hits the high number, there's no question the stock will be above current levels.

The dividend is what Income Investors pay close attention to, and LMT doesn't disappoint. The current distribution is $3.00 a share, yet another increase in a long history of ever higher dividends. In 2001, the dividend was 44 cents. Management is committed to rewarding shareholders. The payout take 33% of earnings. With a Financial Strength rating of A++, investors can rely on the quarterly payment.

But it isn't the only weapon in LMT's arsenal. There are many more and with military engagements in several parts of the world, the company will see increased orders for most of its products. To further help the stock, the company will most likely continue its strong stock buyback program.

Essential numbers: Market Cap is $28.32 billion. Trailing P/E is 10.18 and Forward P/E is 9.45. Price to sales ratio is .62. Price to book is 7.59. Book value is $10.72. Operating margin for the last 12 months was 8.74% and Profit Margin was 6.39%. Return on Equity was 67.5% and Return on assets was 7.13%. Total revenues were $45.80 billion. Total cash is $2.78 billion or $7.94 a share. Total debt is $5.02 billion. Debt to equity is 135%. Current ratio is 1.15. Beta is 1.05. Over the last 52 weeks, the stock is down 4.1%. The range for the last year was $67.68 to $87.06. Total shares outstanding are 349.86 with a Float of 283.89 million. Institutions have 88% of the Float.

All investors should find this story of interest but pariticularly Income investors. There's lots of cash here, strong cash flow and prospects for a significant improvement in earnings. Just watch the F-35 jet program as it will impact the top and bottom lines more than any other project at LMT.