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.

Xcel Energy primarily serves customers in the areas of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. As of December 31, 2008, it provided electricity services to approximately 3,374,772 customers, and natural gas services to approximately 1,868,916 customers.

Xcel Energy, through its joint venture interests in WYCO Development LLC, develops and leases natural gas pipeline, storage, and compression facilities. The company was founded in 1909 and is based in Minneapolis, Minnesota.

From 2004 until yesterday, this stock has traded in a rather narrow range, between $15 and $25 a share, with most of the activity between $17 and $20. It's a utility, not a tech or Internet stock. Don't expect large price movements here. But the dividend is also steady, increasing about 3% to 4% a year. It's currently at 98 cents for a yield of 4.90%.

Utilities grow by asking their regulators for rate hikes. That's how they pay for new capacity to deliver more electricity or natural gas to consumers. Currently, most of the requests made by Xcel are being approved. Its Colorado subsidiary just got permission for a $128.3 million rate hike, phased in over two years as its Comanche 3 coal fired unit won't begin commercial operation until this month. Then another portion ($7.3 million of the total) will be granted next year because of higher property taxes.
In Wisconsin, rates were improved by $6.4 million. In South Dakota, Xcel got a rate raise of $10.9 million.

Given the new increases, 13 analysts see earnings in 2010 at $1.62, up from the $1.49 reported for 2009. Over the last 5 years, earnings increased annually at an average of 5.72%. For the next 5, analysts estimate annual growth of 6.18%. Look for first quarter earnings of 42 cents compared to 38 cents in the first period of 2009. Second quarter estimate is for 24 cents, down a little from 25 cents in the second period of last year.

The company has major nuclear expansion plans for its 2 nuclear plants. It wants to add 235 megawatts of capacity and prolong the plants' lives by 20 years. It will cost about $1.1 billion. Xcel needs federal and state regulatory approvals before it can start the projects.

More numbers: Market Cap is $9.17 billion. Trailing P/E is 13.57 while the Forward P/E is 11.68. Price to sales is .96. Price to book is 1.28. Book value is $15.76. Operating margin for the last 12 months was 15.23%. Profit margin was 7.06%. Return on equity was 9.54%. Total cash is $90.21 million which is about 20 cents a share. Total debt is $8.62 billion. Beta is a calming .42. The 52-week range was $16.01 to $21.94. There are 456.65 million shares outstanding with a float of 455.22 million. Institutions have 60% of the stock.

There's nothing sexy about XEL, just solid earnings and good management. With this winter being colder than most, it would seem earnings may come in a little better than expected. But don't look for any major runs up (or down) in this stock. It's all about the steady dividend which should make income investors take notice.

- Company Web site: www.xcelenergy.com