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.

June 22, 2011 - Park National Corporation (PRK-NYSE) operates as a bank holding company that engages in commercial banking and trust business. It accepts deposits for demand, savings, and time accounts, as well as services these accounts. The company also offers commercial, industrial, consumer, and real estate lending, as well as installment loans, credit cards, home equity lines of credit, and commercial leasing.

The company offers aircraft financing to customers comprising small businesses and entrepreneurs intending to use the aircraft for business or pleasure in the United States and Canada; consumer finance services; and fixed and variable annuities, life insurance, property and casualty insurance, and investment products through licensed representatives.

It operates as a title agency serving residential and commercial customers, who are seeking title insurance for purchases, construction, and refinancing of real estate in the central Ohio area.

As of December 31, 2010, the company operated 141 financial service offices and 169 automated teller machines located primarily in 28 Ohio counties, 1 county of Kentucky, 6 Florida counties, and 1 county of Alabama. It has 2 banks: Park National Bank and Vision Bank. The company was founded in 1908 and is based in Newark, Ohio.

Yes, this is a bank. And banks are out of favor. At least the biggest ones are, the ones over $10 billion. They're the ones that will feel the new legislation about required equity sufficient to withstand the next economic recession. PRK isn't one of the big banks, yet. It's got $7.3 billion in assets and growing. It shouldn't be adversely affected by any new regulations for equity or any other new rules, unless there are some new rules no one knows about.

PRK survived the economic slump relatively unscathed. Its stock price was range bound for the last 2 years, trading between $51 and $74 with the levels between $61 and $74 for the last year. Some of the credit for that stability has to go to the dividend. Now it's $3.76 a share for a yield of 5.8%. With earnings last year of $4.51, the payout is well covered.

But the light isn't green yet for PRK. It's more flashing yellow. That's because the economy hasn't been recovering as quickly as most investors hoped. While interest costs are low and should stay that way, business loans and mortgages still have low demand as unemployment stays at the root of all problems. Expect loan demand weakness to continue for at least another 6 to 12 months. If the recovery shows real signs of growth, then PRK will definitely have higher earnings estimates. In the meantime, valuations reflect all the good news.

Essential numbers: Market Cap is $1.00 billion. Trailing P/E is 14.42 while Forward P/E is 11.5. Price to sales ratio is 3.48. Price to book is 1.54. Operating margin for the last 12 months was 36.32% and Profit margin was 26.12%. Return on equity was 10.21% and Return on assets was 1.03%. (In banking, a return on assets above 1% is considered solid.) Book value per share is $42.06. Beta is .83. In the last 52 weeks the stock is up .79%. There are 15.40 million shares Outstanding with a Float of 10.15 million. Insiders own 2.67% and Institutions have 41.30% of the Float.

An interesting number to note for PRK is its Price to Book. While many large banks are selling well below book value (BAC at .51 and C is .67), PRK sports a 1.54 Price to Book. That suggests investors have a lot more confidence in PRK's ability to generate new loans and be successful than many of its larger rivals.

As the title suggests, investors may have to wait to see any capital gains in this stock, but they will be paid for their time. Valuations for PRK are already high so earnings will have to increase noticably to see the stock move up in a meaningful way. Still this stock in 2004 traded at $142.10 a share and earnings were $6.34. If earnings get to analysts' expectations of $5.65 in 2012, that's not too far from the all-time high for earnings set in 2006 at $6.74.