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Tickers in this Article: KFT, CAG, HCII, JNJ
Interest rates are next to nothing, and investors continue to flock to U.S. Treasuries yielding less than 3%. In many cases, corporate dividends are higher (in some cases, significantly higher) than Treasuries, but investors continue to abandon such equities in favor of the perceived safety of non-interest paying cash or U.S. Treasuries. Consider the following names with outsized dividend yields.

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The Dividend Check
Unlike net profits, a company can not massage dividends. Dividends are cash payments that a shareholder must receive each quarter. Investors who are receiving dividends from a company can be alerted to potential problems if a company suspends its dividends. So, in addition to providing a return on investment, dividends provide a great check on corporate managers.

For example, Johnson & Johnson (NYSE:JNJ) has been in business since 1886, and has been paying a dividend for decades. It's not a coincidence that JNJ shares have been an incredible long-term investment. Over the past decade, JNJ shares are up over 30%, but that is before you include the cash dividend per year. Factor in the dividend and that return nearly doubles over the past decade. Measuring JNJ's returns over longer periods reveals a more stunning record. Today, shares in JNJ yield 3.5% on a stock price that will likely be higher years from now, despite the current short-term issues.

Food for Dividends
ConAgra Foods (NYSE:CAG) is a food company that sells products under popular brand names like Chef Boyardee, Healthy Choice, Hebrew National, Orville Redenbacher, and Slim Jim. Shares trade for under 11-times forward earnings and yield 4.3%.

The recent market turmoil has caused shares in Kraft Foods (NYSE:KFT) to dip a bit, thereby lifting its dividend yield to just under 4%. The giant food company is paying investors more than 10-year Treasuries, and those dividend payments are coming from selling food products that are a staple of many American households. It's unlikely that Kraft will have any difficulty making the dividend payment. Shares trade for a very respectable 13-times forward earnings.

Small-cap insurer Homeowners Choice (Nasdaq:HCII) just recently initiated a dividend of 40 cents a year. At the current share price of $8, the yield is 5%. The company is a provider of homeowners and rental insurance policies in the state of Florida. The one-state concentration may one day prevent the company from paying a dividend, but management clearly feels the company is dividend-ready.

The Bottom Line
Investing in stocks creates wealth over long periods of time. Dividends are an important part of that equation, and investors should not turn a blind eye to them when accompanied by a quality company. (To learn more, see How And Why Do Companies Pay Dividends?)

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