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.

Further, the company offers other telecommunications services, including interconnection, long distance, and custom calling services. It serves residential and business customers. WIN has 1.33 million broadband and 440,400 digital TV accounts. As of December 31, 2009, Windstream Corporation operated 55 retail stores and 2 call centers. The company is based in Little Rock, Arkansas.

It's all about the dividend here. Payout was $1.00 a share for the last 4 years. It will be $1.00 this year and next. Earnings, however, haven't covered the dividend in those periods (dividends are paid from cash flow so earnings don't necessarily have to be greater than dividends.....think of the large depreciation costs which are a non cash item for the reason behind this....depreciation will lower earnings but it won't affect cash flow). The current yield is 7.6%. Very tempting in today's low interest environment.

Windstream is in transition. It was spun off from ALLTEL Corp. in 2006 and focused on wireline services. With heavy competition eroding its market share, the company has been moving more into business data and broadband services. For example, the company made several acquisitions to increase its offerings for ethernet Web access for businesses as well as integrated VOIP (voice over Internet Protocol) and date service; cloud computing and storage and several other business products.

For consumers, the company has expanded high speed Internet access, long-distance voice communication, digital TV service through the Dish Network as well as other Web and computer services. Rather than relying on wireline customer growth, management sees opportunity in these new products which produced about 50% of total revenues last year.

Management recently took advantage of lower interest rates and refinanced $1.5 billion of debt at better rates and longer maturities. That decreases costs and raises cash flow. That higher cash flow could be used to raise the dividend. Other cost cutting initiatives include optimizing network capabilities, better purchasing efficiencies, improved operating programs and upgraded technologies. Windstream already enjoyed a healthy operating income margin of almost 50% for the last 2 years. Expect that to increase with these new measures.

Earnings should be up this year to 77 cents a share compared to 66 cents a share last year. For 2012, 20 analysts forecast 85 cents. For the June quarter, look for 19 cents a share vs. 17 cents last year in the second period. For the third quarter, expect 20 cents compared to 18 cents last year in the third.

Income investors have to like this yield. But there may be hesitation due to some high valuations. Again, the cash flow is strong enough to cover the dividend, so expect that to continue. And with new cost cutting programs in place, the payout could be higher in a relatively short period of time.