With the sharp recovery in stocks since the market bottomed on March 9, 2009, it appears that investors have fallen back in love with growth stocks and chasing momentum. Despite the comparative optimism in the markets today vs. the despair that was nearly universal one year ago, there are still reasons to be apprehensive about the prospects for continued price appreciation. One way to play it a bit more conservatively is to seek out good stocks and funds that also pay dividends.  From utilities to income trusts and blue-chip industrial stocks, below are seven investment ideas that have strong yield components. Keep in mind that dividends, like long-term capital gains, are taxed at 15% instead of regular income tax rates, which run as high as 35%. Plus, don't forget that dividends since 1926 have accounted for more than one-half of the total return from investing in stocks. After coming off of a decade when U.S. stocks produced negative returns, you need dividends as a cushion against continued rough times.  Of the major integrated oil companies, Chevron ( CVX - news - people ) gets most of its income from oil exploration and production; about 86% of its profits in 2008. With 11.2 billion barrels of oil-equivalent reserves, Kelley Wright, Investment Quality Trendseditor, says Chevron is well positioned if crude oil prices, which rose about 75% in 2009 to around $80 a barrel, continue to move higher through 2010. "Since I believe that a reprise of $100 per barrel plus is a layup in 2010, CVX should knock the cover off the earnings ball," Wright says. Paying uninterrupted dividends since 1912, the current cash payout per share of $2.72 results in a dividend-yield of 3.50%. With an average annual dividend increase of at least 10% per year over the last twelve years, Chevron has earned the IQ Trends' "G" designation for outstanding dividend growth.  Wright also likes Altria Group ( MO - news - people ), a holding company whose operating companies include Philip Morris USA, U.S. Smokeless Tobacco Company, John Middleton and Ste. Michelle Wine Estates. The company's brand portfolio consists of successful and well-known brand names such as Marlboro, Copenhagen and Skoal.  As its primary products are obviously tobacco related, Big MO is the ultimate "sin" stock. While tobacco may not be politically correct in some circles, Altria Group is the archetype cash cow and practically prints money. The highest yielding stock in IQ Trends' Lucky 13 with a current yield around 6.8%, the company has paid dividends since 1928 and is most definitely "G" rated by IQ Trends for outstanding dividend growth.  The one security Richard Lehmann, editor ofForbes/Lehmann Income Securities Investor, has selected for several of his model portfolios for 2010 is the Gabelli Global Gold, Natural Resource & Income Trust. "My approach to income investing has been to diversify over a multiple of income drivers and this fund provides several," says Lehmann. It provides geographic diversifications into gold and natural resources, areas which Lehmann feels will be strong performers in 2010. It also offers a 10% yield paid monthly and trades at a small premium to its net asset value.  Charles Carlson, editor DRIP Investor,thinks General Mills ( GIS - news - people ) offers an interesting choice for total return in 2010. The stock has appeal regardless of market conditions. Earnings estimates are rising, so its shares should do well if the market rally continues. And, says Carlson, "the stock will hold up during down markets given the defensive qualities and recession-resistant business." He adds, "if inflation fears increase, General Mills, with its pricing power, should see decent investor support. The yield of nearly 3% provides added appeal." General Mills offers a direct-purchase plan whereby any investor may buy stock directly. Minimum initial investment is $250.  Gordon Pape, editor of the Canada Report, recommends Daylight Resources (DAYYF). This underrated Canadian energy trust hit the news earlier this year with the acquisition of mid-level producer Highpine Oil & Gas. The move boosts Daylight's cash flow and provides better production balance between oil and natural gas. The trust pays monthly distributions of C$0.08 per unit to yield 10% and should be able to maintain that payout even after the new trust tax comes into effect in 2011. Pape has a one-year target of C$12, which with distributions projects to a 33% return in 2010.  As the market rally matures in 2010, one group that is outperforming the market is utilities. High dividends and steady cash flows promise superior long-term total returns and resistance to market pullbacks. One of Insiders Plus' editor Jack Adamo's favorites is Vodaphone Group ( VOD - news - people ), a British telecom that owns 49% of Verizon ( VZ - news - people ) Wireless, the jewel of the North American wireless phone industry. It is widely believed to have the best network in America. "The company is doing very well, but will fare even better next year when Apple's exclusive deal with AT&T ends and Verizon begins selling iPhones and taking market share from AT&T," says Adamo. "I prefer Vodaphone to Verizon stock because Vodaphone has great growth prospects in world markets, especially India, and Verizon's land-line business is sluggish," he says. Vodaphone shares yield about 6%. Adamo says to buy Vodaphone up to $28.  Adamo also likes Southern Company, one of the steadiest growing electric utilities in America, due to its dominant position in the fast growing South. It has a compound annual total return of 14.7% annualized for the last 10 years, and prospects remain good. The shares yield 5.2%. Adamo recommends buying Southern Company up to $40.  Kelley Wright, Richard Lehmann, Gordon Pape, Charles Carlson and Jack Adamo may have positions in some of the securities mentioned in this article.
A fat dividend yield can help smooth out what may be a rocky time in 2010. Here are some places to find nice ones.