NEW YORK ( TheStreet) -- According to Benjamin Graham's margin of safety principal -- a measure of relative value between stocks and bonds -- buying an S&P 500 index fund poses less risk than purchasing long-term U.S. debt.However, the dividend yield of the S&P 500 -- at 2.09% -- is scraping against all-time lows. This puts income investors in a bind: Bonds with a strong credit rating don't yield much, exposing investors to a substantial amount of interest rate risk on the 10-30-year end of the curve. Stocks -- when purchased through an index fund -- offer an earnings yield far in excess of U.S. Treasury bonds, but don't offer much in terms of absolute yield. That's acceptable for those seeking long-term appreciation, but troublesome for those in need of income. One strategy that income-focused investors should consider is allocating their portfolios toward a blend of U.S. fixed income and carefully chosen dividend stocks. Even though U.S. bond yields are low, if the country becomes tangled in a Japan-like quagmire, already-low yields could drop further. This scenario could offer capital appreciation opportunities and (at least some) recession protection. Regarding stocks, there are several high-yield opportunities that -- with diversification -- offer reasonable opportunities for income, capital appreciation and safety. The 10 stocks on the following pages have been screened for the following criteria:
- Each stock yields more than a 30-year Treasury bond.
- TheStreet Ratings recommends each stock as a buy.