A method is described to derive source and conductivity estimates in a simultaneous MEG and EEG source analysis. In addition the covariance matrix of the estimates is derived. Simulation studies with a concentric spheres model and a more realistic boundary element model indicate that this method has several advantages, even if only a few EEG sensors are added to a MEG configuration. First, a simultaneous analysis profits from the `preferred' location directions of MEG and EEG. Second, deep sources can be estimated quite accurately, which is an advantage compared to MEG. Third, superficial sources profit from accurate MEG location and from accurate EEG moment. Fourth, the radial source component can be estimated, which is an advantage compared to MEG. Fifth, the conductivities can be estimated. It is shown that conductivity estimation gives a substantial increase in precision, even if the conductivities are not identified appropriately. An illustrative analysis of empirical data supports these findings.