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.

October 6, 2010 - W. P. Carey & Co. LLC (WPC-NYSE) together with its subsidiaries, provides long-term sale-leaseback and build-to-suit transactions for companies worldwide and manages a global investment portfolio. It invests primarily in commercial properties that are each triple-net leased to single corporate tenants, which requires each tenant to pay substantially all of the costs associated with operating and maintaining the property.

You have to believe commercial property has hit bottom to like WPC. Certainly a lot of investors do since the stock continues to climb and is only about 20% below its all-time high of $36.90, set in 2007. Is commercial property ready for a come back and can this stock continue to move up?

Second quarter results were a pleasant surprise. Revenues were up 32% compared to last year's second period. The increases came from the company structuring 11 new investments with a value of about $440 million during the first six months of the year. That's an improvement of 88% compared to the first six months of last year. There was also a 700 basis point decrease in operational expenses, as a percentage of revenues, that boosted earnings. As for occupancy rates, they slipped about 200 basis points for properties owned and operated by the company. That was mostly due to the loss of a large tenant at a distribution center in North Carolina. A new tenant is being pursued.

In the company's non-traded Real Estate Investment Trusts known as CPA REITs, occupancy rate remains at 98%. Income for the second quarter advanced by 60% compared to last year's second quarter.

Income investors focus on the dividend, and this one is generous. Pay out has increased every year since the company went public in 1998 with $1.65 a share. This year, the total should be $2.02. Most quarters the company is increasing the dividend by a fraction of a penny so next year, expect at least $2.03. The yield at current levels is 6.8%. Last year, in December, there was a special dividend declared of 30 cents, over and above the regular dividend. There was a similar special dividend paid in December of 2007.

The company continues to raise new capital to expand its portfolio. Since the commercial real estate market is soft, fresh money allows management to make very good deals when buying properties. However, there is competition to buy buildings starting to come back into the market which is a good sign that maybe the worst is over for commercial properties. But transactions are few and far between making comparable sales difficult to determine. And if the economy slides, more commercial space will definitely be on the market. One of Carey's attractiveness is its geographic diversity, having properties in 16 countries. While the bulk are in the U.S., a meaningful amount are not.

More numbers: Officers and directors own 33.60% of the stock. Market cap is $1.18 billion. Revenues for the last 12 months were $256.44 million. Trailing P/E is 16.02 while Forward P/E is 15.60. Price to sales ratio is 4.57. Price to book is 1.90. Book value is $15.69. Operating margin for the last 12 months was 36.21% while Profit margin was 28.93%. Return on equity was 11.15%. Return on assets was 5.13%. There's almost $40 million in cash for $1.00 a share. Total debt is $379.11 million. Beta is .97. There are 39.32 million shares outstanding with a Float of 25.99 million. Institutions own 9.8% of the Float.

Income investors who think the worst is over for commercial properties will like this stock. Dig deeper to learn more about its holdings and history. It's worth the effort.

- Company Web site: www.wpcarey.com

- Ted Allrich