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.

Products are used in various microelectronic applications in autos, computer peripherals, telecommunications systems, consumer products, industrial automation, and control systems. The company sells through distributors and retailers. STMicroelectronics N.V. was founded in 1987 and is headquartered in Geneva, Switzerland.

It's not often you can find a tech stock with a decent dividend. It's even rarer to find one that has a payout higher than many utilities. But STM is one of those rare stocks. Between the dividend and the current price level, this makes a compelling story.

Like most stocks, STM got pounded in '08 and bottomed in early '09 at $3.70 a share. That was down from its high of $73.90 in 2000. It rallied until early in 2011 when it got to $13.50 but slipped since then. After touching $5.34 on December 19, 2011, it started up again to its current level. Can it keep going?

2011 was tough on STM. Sales dropped probably by 5% (final numbers will be out in the next few weeks). Earnings should show a decline of 34% to 48 cents if the consensus from 6 analysts is correct (there is a range of 39 cents to 58 cents), down from 74 cents last year. (In 2009, the company reported a loss of 72 cents a share. Volatility is part of the semiconductor world.) This year, 7 anlaysts think earnings could be anywhere from negative 7 cents to positive 80 cents. The consensus is for 32 cents. That's an average from all analysts which aren't quite sure what earnings will be.

Management is adjusting to the new reality by slowing operations at many plants and stopping new capital expenditures. It also paid off some debt which is now only 10% of capital and totals $1.71 billion. To help further, there's a new product line called Orly. It allows consumers to record multiple high-definition streams at once. It also seamlessly streams content across tv sets, tablets and laptops at high speed while accessing operators' applications stores as well as open market stores. This is where new demand is growing, and with its latest generation broadband home entertainment platform, STM can expect to capitalize on it.

Furthermore, the company recently won a major design competition for its chassis-controller application with a major Korean car manufacturer. The new contract complements its existing one for its anti-collision systems and audio solutions. These are long term contracts and should boost sales and earnings for several years.

Current dividend rate is 40 cents, creating a yield of 6.4%. It's covered by earnings but not by much. And next year, it's hard to guess what earnings will be, but if they're at the high end of estimates, there's no problem with the payment. Over the years, the dividend has fluctuated, right along with earnings. It was started in 2000 at 3 cents a share.

- Essential numbers:
- Market Cap: $5.55 billion
- Trailing P/E: 8.8
- Price to sales ratio: .55
- Price to book: .73
- Operating margin: 4.62%
- Profit margin: 8.48%
- Return on equity: 5.97%
- Return on assets: 2.23%
- Revenues for last 12 months: $10.38 billion
- Cash: $2.53 billion
- Cash per share: $2.86
- Debt to equity: 12%
- Current ratio: $1.97
- Book value per share: $8.87
- Beta: 1.82
- 52 week change: - 44.55%
- Shares Outstanding: 884.98 million
- Float: 633.82 million

STM is trading at a P/E valuation that is very compelling since its average annual P/E ratio has been between 11.6 and 51 in the past. There's also the relatively high dividend to sweeten the temptation. Just keep in mind that the semiconductor industry is one of the most volatile and can turn quickly from strong demand to almost none quickly. If you are a little more on the aggressive side, you'll find this stock of interest.