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.

As of December 31, 2009, it owned generating facilities with an aggregate generating capacity of 1,257 megawatts; transmission system of approximately 22 miles of 345kV lines, 434 miles of 161 kV lines, 745 miles of 69 kV lines, and 81 miles of 34.5 kV lines; and a distribution system of approximately 6,905 miles of lines. The company also owns and operates water pumping facilities and distribution systems consisting of approximately 87 miles of water mains in 3 communities in Missouri.

In addition, the Empire District Electric Company provides natural gas distribution to customers in 44 communities in northwest, north central, and west central Missouri. Its principal gas utility properties include approximately 87 miles of transmission mains and approximately 1,118 miles of distribution mains. Further, it engages in leasing fiber optics cable and equipment. The company was founded in1909 and is based in Joplin, Missouri.

Higher rates are pending approval for EDE in Missouri and Kansas for electricity, and a gas tariff increase will start this month. The company is seeking a rate hike of $68.2 million, up 19.6%, in Missouri, while in Kansas, it's looking for $5.2 million in hikes, up 24.6%. Regulatory approval or disapproval will be in early July for Kansas, late September in Missouri.

In early April, in Missouri, a new gas tariff took effect. Approval for a 4.4% increase or $2.6 million was a little less than the $2.9 million the company requested.

There will be added generating capacity this year. By summer, a coal fired plant will come on line, giving the company 50 megawatts of power. But the big project, an 850 mw coal fired unit scheduled for commercial operation has been delayed at least 2 months, into the fall. Originally, the plant was due to open by late summer. Empire won't own all of the new unit, only 102 mw.

Weather always is the unknown factor for utilities. Last summer was mild, revenues were down by $10 million in the third quarter. Analysts expect more normal temperatures this year, helping sales. Also, new rate hikes will add to this year and beyond.

To build those new plants described above, the company is selling common stock and borrowing. Last year, it raised $69 million of the authorized $120 million in stock. The program allows the company to sell common when management feels it is appropriate. Expect the rest of the authorized stock to be sold this year putting some pressure on earnings per share until the new rate hikes and new plants become effective.

Earnings have continued to increase over the last 3 years, albeit very small. In 2007, they were $1.09, then $1.17, followed by $1.18. This year, consensus from 3 analysts is for $1.29, and next year $1.46. First quarter results should be 28 cents, compared to 32 cents last year in the first period. The company will hold its quarterly conference call to discuss the results for the first quarter and twelve months ended March 31, 2010 on Friday, April 30, 2010, at 1:00 p.m. Eastern Time (12:00 p.m. Central). The conference call will follow the Company's earnings news release, which will be available on Thursday, April 29, 2010.

More numbers: Revenues were $490.2 million in 2007, then $518.2 million, follwed by $497.2 million last year. Market Cap is $710.85 million.
Trailing P/E is 15.72 while Forward P/E is 12.71. Price to sales ratio is 1.42. Price to book is 1.17. Book value is $15.75. Operating margin for the last 12 months was 18.92% while Profit margin was 8.31%. Return on equity was 7.32% and Return on assets was 3.31%. Total cash is $5.62 million or 15 cents a share. Total debt is $745.73 million. Current ratio is .72. Beta is .67. There are 38.30 million shares outstanding with a Float of 38.04 million. Institutions own 41.10% of the stock. The annual dividend is $1.28, a constant over the last 4 years. The yield is 7%.

Income investors will like the yield here. However, this is a relatively small stock so the risks are a bit higher. Also, new stock being issued requires the same dividend as the old. Still, the dividend has been steady for years, and with new rate hikes and new plants almost operational, the company should be able to deliver the well above average dividend.

- Company Web site: www.empiredistrict.com