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Tickers in this Article: SWY, WFMI, SVU, COST, WMT, FDO, DG
While most of us are aware of the dividend yields available to investors in the utilities, retail and telecom industries, few know that many firms in the grocery industry actually pay shareholders a reasonable yield to hold their shares. So let's take a look at some of the grocers currently paying out a "tasty" dividend to shareholders.

IN PICTURES: 10 Ways To Cut Your Food Costs

Safeway is On the Right Path
One of the country's best known grocers, Safeway (NYSE:SWY) is currently paying investors a 2.2% yield. The California-based company recently reported a strong fourth quarter, as it returned to a profit after reporting losses in Q4 2010. Management reported net income rose to $229.6 million (62 cents per share), beating analyst estimates of 58 cents per share. Compare this to last year's $1.61 billion loss ($4.06 per share), where profits were crushed by a large charge, and it's clear the Safeway is now headed in the right direction. Revenues were also strong, rising 1% and beating consensus estimates in the process. The stock performed well in the month of February, returning 5.4%.

Whole Foods Finishes Strong
Specialty health and organic food supermarket Whole Foods (Nasdaq:WFMI) also reported strong quarterly results in February, with profits surging nearly 80%. Net income came in at $88.7 million (51 cents per share) compared to $49.7 million (32 cents) last year. Revenues were also up an impressive 14%, with same store sales surging 9% - its highest mark in four years. Guidance was also strong, with management expecting comps to remain in the high single digits, which helped push shares up nearly 9% in February. The strong results and positive outlook also led management to reinstate a 10 cent quarterly dividend, amounting to a 0.70% yield. Nothing to write home about, but it's icing on the cake as the company's shares continue to rally.

Supervalu Struggles
Not all news was good on the grocer front in the latest quarter however. SUPERVALU (NYSE:SVU) reported very poor third quarter numbers, highlighted by a loss of over $200 million on the bottom line. Sales were down 6% in the quarter to under $9 billion, with comps trending down nearly 5% in the process. Management also warned that full-years comps should be weak as well, expected to be in the 6% range. Supervalu shares have had a rough ride thus far in 2011, down over 12%. However, the stock's 4.2% dividend yield is a good buffer for investors waiting for a turn around in the company's fortunes.

Costco: The Other Chain
Investors can also look to less traditional players in the grocery space to satisfy their dividend hungers. Wholesale super-chain Costco (Nasdaq:COST) currently pays shareholders a 1.1% yield on its shares. The Washington based company recently announced January sales that were very strong for the bulk retailer, topping 2010 revenues by 12%.

Wal-Mart Still On Top
Wal-Mart (NYSE:WMT), which operates its own Wal-Mart supercenters along with Costco rival Sam's Club, can also act as a play on the grocery space. The stock's 2.3% yield is an industry favorite, and chances are you already own Wal-Mart shares in one way or another. The mega-cap retailer has struggled recently with domestic sales growth, as many consumers have switched down to the ultra-competitive dollar stores space, to retailers like Family Dollar (NYSE:FDO) and Dollar General (NYSE:DG). Wal-Mart is fighting back, however, with the recent announcement that the company will be launching a new Wal-Mart Express concept, which will allow customers to shop in scaled-down Wal-Mart corner stores. We'll have to wait and see if this can help drive domestic sales in the future, but for now the relative safety of the stock along with the healthy dividend are good enough for us.

The Bottom Line
The grocery industry is largely dependent on the on the strength of the overall economy. As consumers begin to feel more confident, they spend more at the local store. As the economy continues to improve, taking a position in the sector could be a smart play, especially with the added benefit of dividend yields that will add to the total return of your portfolio. (For more, see 5 Economic Changes That Fatten Your Grocery Bill.)

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