Let The Income Flow

Hunting for a safe, decent yield these days is a lot like looking for the perfect house: Even if you find it, you start worrying right away that it may lose its value. Just look at what's happening in the neighborhood. Banks are offering less than 1% if you give them your money for a year. Hand it to the U.S. government for a 10-year bond, that bedrock of safety, and you'll get less than 3%.

Some big consumer-staples stocks are offering some attractive dividend yields right now. Coca-Cola (ticker: KO) yields 2.9%; General Mills (GIS), 2.9%; Johnson & Johnson (JNJ), 3.4%; and Procter & Gamble (PG), 3.2%. While the yields will decline when the stocks strengthen, you could end up with some nice capital appreciation. You can also play dividends through mutual funds. Carrie Coghill, chief executive of Coghill Investment Strategies in Pittsburgh, likes the Federated Strategic Value Dividend Fund (SVAAX), now yielding about 3.3%. It has the benefit of geographic diversification, with exposure to both U.S. and overseas shares.

Source: Barrons

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