Dividend-seeking investors should really telescope in on markets abroad with exchange traded funds (ETFs).

Foreign stocks have had much more attractive yields these days, as proven by a foreign large-cap stock measure in developed markets which showed yields at 3.7% payout as of July 31, compared with 2.4% for U.S. stocks, reports Shefali Anand for The Wall Street Journal.

Dividend-paying ETFs and stocks are safer ideas in turbulent markets like the one we are experiencing, giving retiring baby-boomers an edge when looking for ways to get an income stream. Unfortunately, for now, many of the highest-paying dividend stocks in the United Sates are within the financial sector.

The same is true for those overseas, however, many of these financial institutions haven’t been as hard-hit as those domestically.

Dividend-yielding foreign stocks bring other risks to the table, as well. The main troubles are currency risk, foreign banks will slow if credit meltdown goes deeper, and share buybacks are more common now than in past years.

There was a time when U.S. companies had higher payouts, but over time, they’ve been taking those earnings and putting them back into the business. Foreign companies tend to take a more traditional approach: money earned belongs to the shareholders.

Dividends are still an objective way to add value to a company, and some of the ETFs accessing this are:

• PowerShares International Dividend Achievers Portfolio (PID): yields 4.1%, down 16.9% year-to-date
• WisdomTree International Small Cap Dividend (DES): yields 2.6%, down 7.2% year-to-date
• iShares Dow Jones EPAC Select Dividend (IDV): 8.3% yield (Caution: 50% of assets are in financials), down 24% year-to-date

Tags: Currency ETFs, DES, Dividend ETFs, IDV, PID, Sector ETFs