SAN FRANCISCO — The way Jill Evans sees the stock market, investors don't need to sacrifice capital appreciation to reap the payouts and relative safety of dividend-paying shares.

SAN FRANCISCO — The way Jill Evans sees the stock market, investors don't need to sacrifice capital appreciation to reap the payouts and relative safety of dividend-paying shares.

And Evans, who runs the Alpine Dynamic Dividend Fund with Kevin Shacknofsky, said she believes the market climate nowadays is a good place to test that theory.

"Dividend stocks are a great investment right now whether you're on offense or defense," she said. "Our fund gives investors a strong yield of about 12.8 percent and also allows them to participate in equity if the market continues to rally."

"We're very optimistic in general about the outlook for the market. We've come very far, very fast, so we wouldn't be surprised if the markets took a short term breather."

The no-load fund returned 16 percent over the 12 months through May 10, on a par with its Equity Income category's 15.7 percent average gain, according to fund tracker Lipper Inc. The fund's 19.5 percent annualized three-year return tops a 15.5 percent average gain for its peers.

Evans cautioned, however, that the Dow Jones Industrial Average's record highs may have run its course.

"We're very optimistic in general about the outlook for the market," she said. "We've come very far, very fast, so we wouldn't be surprised if the markets took a short-term breather."

Regal Entertainment Group is among the fund's top 10 holdings and accordingly is one of Evans's favorites. The company operates almost 6,500 movie screens across the country.

"From Spiderman 3 to numerous popular sequels, we expect to see record box office receipts this summer," she said.

Evans added that Regal's in-theater advertising spinoff National Cinemedia will continue to be "an extremely profitable venture" for the parent company.

Gatehouse Media is another of her top suggestions. The publisher benefits from cost efficiencies by consolidating local newspapers and online media, she explained.

"They have a really interesting model," Evans said. "They pay out 80 percent of free cash flow and investors can expect dividends to grow as Gatehouse continues to consolidate."

Another recommendation: Aircastle Ltd., which leases aircraft. Evans said she expects steady overseas demand for the company's services, mainly from the Middle East and Asia.

"They have long-term contracts booked through '07 and almost all of '08," she said. "We like Aircastle because we get a good dividend while we also gain exposure to the strong global aircraft market."