By Lisa Springer NEW YORK ( TheStreet) - This New Year, income investors like me will likely be finding some of the richest dividend yields overseas. As a general rule of thumb, foreign stocks often have higher dividend payouts than their U.S. counterparts, and pay a much larger dividend as well. While lately there's been more emphasis on dividends in the U.S., domestic stocks on the whole still offer some of the lowest yields in the world. At present, the Standard & Poor's 500 Index yields a paltry 1.8%. Yields on the MSCI EAFE Index, a widely followed measure of stocks in developed foreign markets, are far more attractive at 2.4%. When foreign companies have extra cash, they are far more likely than U.S. firms to share the cash with investors as dividends. And most indicators suggest it will be foreign companies with much of the excess cash this year, since many overseas economies are predicted to grow faster than the U.S. Experts forecast 3% growth for the U.S. economy in 2011, while growth is pegged at 6% for Latin America and 7% for parts of Asia. See "The Most Undervalued 12% Yield on the Planet" To profit from growth rates twice those of the United States, income investors should be adding foreign dividend-paying stocks to their portfolios right now. Here is a list of foreign stocks that offer strong appreciation potential and hefty dividend yields. For more, see our free course: "Guide to the World's Highest Yields." 1. Cellcom Israel Ltd ( CEL) Yield: 11% Cellcom Israel is a leading Israeli cellular service provider established in 1994, currently serving some 3.4 million subscribers. The company has been paying quarterly dividends since 2007. Last year, the company generated $1.8 billion of cash flow and paid out $639 million in dividends. Dividends have grown 39% in the past three years to an annualized rate of $3.58. Cellcom Israel continued to record robust growth in the September quarter of 2010. Operating income was up 14.1% year over year, and consensus analyst estimates target 9% annual growth during the next five years, providing ample cash flow for more dividend increases.
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100.