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.

Like most banks, earnings were down for the last 3 years at BMO, going from $5.16 in 2007 to $3.77, then $3.33. But that's about to change. Three analysts have a consensus estimate of $4.68 for 2010, then increasing to $5.49 in 2011. Next earnings announcement, for the second quarter (fiscal year ends October 31), will be on May 26. Look for $1.13, better than 20% ahead of last year's 93 cents. For the third quarter, expect $1.19, beating last year's $1.05.

While earnings have diminished in the last few years, the dividend has increased. In 2006, it was $2.26 a share, then $2.71; in 2008, it was $2.80. That was the payout for 2009 as well. It looks like this year will also be $2.80 unless the board decides to move it higher based on better earnings. The yield is a respectable 4.40%. It takes about 64% of earnings to pay it.

Loan loss provisions are improving as well. They were down 14% in the first quarter, compared to the fourth quarter of last year, and down 22% from the same period last year. One area of concern is the U.S. real estate market which will most likely remain under pressure for the rest of this year. For the year, analysts see loan loss reserves down about 15% to $1.35 billion. As the real estate market improves, as well as the general economies of the U.S. and Canada, expect lower provisions for loan losses.

Management announced it wants to increase its U.S. presence. It already owns Harris Bank in Chicago. Look for BMO to buy more banks to quickly expand its franchise. It has a strong enough capital base to expand without concern for new equity or debt or the regulators.

More numbers: Market Cap is $33 billion. Trailing P/E is 15.9 while the Forward P/E is 10.85. Price to sales is 3.37. Price to book is 1.89. Book value is $32.13. Operating margin was 30.28% in the last 12 months while Profit margin was 21.89%. Return on assets was .53%. Return on equity was 11.13%. Beta for the last 12 months was 1.51. 52-week range was $34.67 to $65.68. There are 555.54 million shares outstanding. Institutions own 51.70%.

This is a solid bank with nothing exciting to make the stock price jump. But there's nothing pending that would make the stock price decline sharply. While the stock took a beating in the latter part of 2008 and early 2009, it was a victim of a total market meltdown, and the fear that seized all bank investors. Now much of that anxiety is gone, and the stock is moving toward its all-time high of $72.80, set in 2007. Income investors will find this stock worthy of their time.

- Company Web site: www.bmo.com