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.

The company's key product lines include MDI, amines, surfactants, epoxy-based polymer formulations, textile chemicals, dyes, maleic anhydride, and titanium dioxide.

Huntsman operates in five segments: Polyurethanes, Advanced Materials, Textile Effects, Performance Products, and Pigments. Its Polyurethanes, Advanced Materials, Textile Effects, and Performance Products segments produce differentiated organic chemical products, and Pigments segment manufacures inorganic chemical products. Huntsman Corporation has a collaboration agreement with Innospec Inc. The company was founded in1970 and is based in Salt Lake City, Utah.

Huntsman just won a settlement with an insurance company for $110 million. It had to do with a fire in its Port Arthur olefins plant. It already collected $365 million from the insurer. The CEO stated the company will use the money to pay down debt.

That's good because there's quite a bit of debt here. It's 67% of capital. Total debt is $4.18 billion. On the plus side, there's $924 million in cash in the bank, not counting the insurance settlement of $110 million. Long term interest earned is 1.2 times. The company recently refinanced some of its debt, 243 million euros worth, pushing out the loans due in 2013 and 2015 with $350 million of senior notes due in 2020. Cost of the postponement was .205 of a percentage point higher. Analysts think repaying the debt will be easier later as the company should do better as the global economy recovers. Expect more extensions of debt as interest rates stay low.

The last 2 years have seen losses at HUN. In 2007, the company earned $1.07 a share, then lost 24 cents, going deeper in the red in 2009 with a loss of $ .79. But this year, consensus estimate from 6 analysts is for 10 cents a share (with a range from minus 31 cents to a positive 28 cents). Next year, they expect 80 cents a share (with a range of 69 cents to 90 cents). For the June quarter, they see 6 cents a share compared to negative 27 cents a share last year in the second quarter. In the third period, analysts forecast 14 cents a share vs a negative 24 cents in last year's third.

The annual dividend here is 40 cents, started in 2007. It has been there for 3 years without change. Even in the loss years, the payments were made so it would seem the dividend is relatively safe. If it were going to be cut, it most likely would already have happened. Part of the assurance of dividend payments are the adhesives and polymers Huntsman sells. Both are lightweight and have high-tensile strength, attributes needed in autos and aircraft looking to lower fuel costs by using lighter materials while still being strong.

The stock price has reflected the poor earnings for the last 2 years. In 2008, the price went from $25.70 to $2.80. Once it hit bottom of $2.00 in 2009, the rebound was swift, taking the stock to $11.60 by the end of the year. At the beginning of 2010, the stock hit $14.30. Now it's below $10 again. So volatility is part of ownership here.

More numbers: Market Cap is $2.18 billion. Sales for 2009 were $7.763 billion, down from $10.215 billion n 2008. Forward P/E is 11.37. Price to sales is .27. Price to book is 1.34. Book value is $6.84. Operating margin for the last 12 months was 2.02%. Profit margin was 2.84%. Return on equity was 17.20% while Return on assets was 1.32%. Total cash per share is $4.64. Current ratio is 2.22. Beta is a very high 2.09. There are 239.06 million shares outstanding with a Float of 210.46 million. Insiders own 20.80% of the stock. Institutions have 62.10%.

This company does well in a thriving global economy. If investors believe recovery is on track and that basic industries such as concrete, auto and housing are about to heal, then HUN should be of interest. Even if recovery takes a little longer than one might expect, the dividend makes the waiting much more tolerable.

Company Website: www.huntsman.com  

- Ted Allrich