An often-overlooked industry may just be the best place in the entire market to find steady income. Major players are paying rock-solid yields as high as 7% to 10%.

When you think of energy companies, you probably think of oil and natural gas. Or maybe you even think of alternative energy such as wind, solar and nuclear. But another segment of the industry altogether — one that never makes headlines — is one of the best places to invest for income.

The business: Propane.

The propane industry isn’t just the tank attached to your grill. It’s much more than that. Propane is big business.

• In 2007, propane accounted for nearly 4% of total U.S. energy use.
• More than 14 million American families use propane.
• About 80% of all farms in the U.S. use propane to power equipment such as irrigation pumps.
• More than 10 million buses, cars and trucks worldwide run on liquefied propane.

Propane, which is one of the cleanest-burning fuels, is also used to generate electricity. Unlike natural gas, propane can be easily stored and transported in liquid form, in which it is 270 times more compact than gas.

Amerigas Partners (NYSE: APU) is the largest propane distributor in the United States. The company sells about one billion gallons of propane a year to 1.3 million residential, industrial and agricultural customers. It has 600 locations in 46 states.

#-ad_banner-#Why is propane better than any oil or gas company? Propane has a few key advantages.

The main advantage is the high switching cost. Amerigas leases its tanks to retail customers. In order to switch to another propane company, customers must eat the cost of switching tanks, which usually outweighs any cost savings. In addition, natural gas often isn’t available in the rural communities where propane is often used. A switch to oil necessitates replacing appliances.

This high switching cost give Amerigas strong pricing power. As demand has declined in the slower economy, the company has been able to counter the effects by raising prices. Unlike most utilities, the propane business is unregulated, which give Amerigas tremendous pricing flexibility. Overall, the company has a stable customer base and dependable revenue.

Just look at the numbers.

Net income for the company has increased an average of +14% a year for the past five years, and net income is up +22% so far in fiscal 2009. And here’s the best part: As a master limited partnership, Amerigas is required to pay out the bulk of earning to its shareholders.

The company pays quarterly distributions, which were recently raised in April from $0.64 a quarter to $0.67. At today’s price, the current yield is a solid 7.1%. Amerigas has never cut the distribution since it began in 1995, and the company has raised the distribution every year since 2005. Management says the company intends to raise the distribution +5% every year.

A key measure of financial strength and profitability for a company is its return on equity. ROE measures how efficiently a company can turn shareholders’ capital into profit. While this number varies by industry, a number of 20% or higher is considered excellent. Amerigas earns an astounding 58% ROE, at the top of its industry.

One of the best things about Amerigas is its prospects for future growth. Even though the company is the largest propane marketer in the country, is still has just a 9% market share with plenty of room to grow. The business is highly fragmented and Amerigas has been able to gobble up smaller operators. In 2008 alone, the company increased its sales by about 20 million gallons.

A high yield offered by a company with a stable and growing business is just what the doctor ordered for today’s uncertain environment. However, given the fact that APU has soared more than +35% so far this year, investors might want to buy on a pullback to $35 or below.