NEW YORK ( TheStreet) - At a time when bond yields are skimpy, plenty of investors have been considering dividend-paying stocks as a source of income. But when stock prices rise, dividend yields fall. And after the recent rally, dividend checks have begun to seem meager. The current yield on the S&P 500 is 1.76%, down from 4.12% at the bottom of the market in March 2009.For investments that still provide decent yields, consider dividend funds. A top choice is iShares Dow Jones Select Dividend ( DVY), which yields 3.42%. Holdings include cigarette maker Lorillard ( LO), which yields 5.6%, and power producer Entergy ( ETR), with a yield of 4.5%. Another compelling dividend fund is Federated Equity Income ( LEIEX), which yields 2.82% and holds AT&T ( T), with a 5.8% yield. To own a broad collection of dividend payers, try MainStay Epoch Global Equity Yield ( EPSYX), which yields 3.1%. Besides holding top U.S. dividend payers, MainStay also buys foreign companies. The global approach provides an advantage because many overseas companies yield more than their U.S. counterparts. The geographic diversification also helps to make the fund's income stream particularly reliable. If companies in one region suffer, holdings in other countries may continue to prosper. Portfolio manager Eric Sappenfield is wary of sluggish companies that pay high dividends. Instead, he prefers steadily growing businesses that can increase their dividends every year. Of the approximately 100 stocks in the portfolio, 90 increased their dividends last year. The average dividend increase was 11%, a substantial hike that indicates the companies are confident about their prospects for future growth. In 2008, 61 holdings increased payouts, a noteworthy achievement in a year when many blue chips slashed their dividends. To avoid dividend cuts, Sappenfield looks for rock-solid companies that can increase earnings for years to come. He likes companies that have plenty of cash flow to cover dividends. Many holdings use part of their extra reserves to pay down debt or buy back shares. "We like stocks with battleship balance sheets," he says. Sappenfield's kind of steady stocks lagged during the rally of 2009, when investors raced to take on more risk. But the MainStay fund has distinguished itself in downturns, outdoing 90% of competitors in the turmoil of 2008, according to Morningstar. During the past five years the fund has returned 4.6% annually, outdoing 75% of competitors in the world stock category.