With interest rates near zero and traditional income investments like savings accounts and certificates of deposit earning next to nothing, dividend-paying blue chips have become wildly popular lately… especially in high-yield sectors such as telecommunications.

For example, in the past 12 months both Verizon (NYSE: VZ) and AT&T (NYSE: T) have returned 19% — handily outperforming the S&P’s 10% return during the same period.

That makes sense. Telecom is considered a “recession-proof” industry. Regardless of what’s happening with the economy, people will still pay for cell phone and Internet access. And with Verizon and AT&T each yielding around 5%, both companies look like a good choice for income investors in search of high yields.

But while a 5% dividend yield might sound like a lot when you compare it to the paltry 2.1% paid by the rest of the S&P, it’s by no means the best you can find in this industry.

In a recent issue of High-Yield International, Paul Tracy found a blue-chip telecom that enjoys the same competitive advantages as AT&T and Verizon, pays a 7.9% yield, and better yet… it has a lot more room for growth.

Chances are you’ve never considered this company. In fact, I doubt you’ve ever heard of it.

That’s because the company — Telefonica Brazil (NYSE: VIV) — isn’t based in the United States. Instead, with over 11 million fixed-line clients, 3.5 million broadband users, and 680,000 pay-TV subscribers, Telefonica Brazil is one of the largest telecommunication companies in Brazil.

And not only does this company dominate both the fixed-line and broadband business, but with its recent acquisition of Vivo Wireless, Telefonica is now also the largest wireless operator in Brazil as well.

Now, it’s true that VIV’s shares have sold off, thanks in part to recent weakness in the Brazilian market. Paul sees that as an opportunity. [Editor’s note: Telefonica Brazil makes two annual “return of capital” payments, and most stock screeners don’t take that into consideration when they report the stock’s yield. As a result, most financial websites like Yahoo! Finance and Marketwatch incorrectly report its yield.]

Unfortunately, most investors will never consider a stock like Telefonica Brazil at any price (or dividend yield)… or any other international stock for that matter, even though they can often be bought right here on the New York Stock Exchange. Some investors think they’re too risky. 

That’s a huge mistake. Just because a company is located outside the United States, doesn’t mean it’s risky. 

In fact, investing in some foreign countries can actually be safer than investing here at home. 

But don’t just take my word for it, here’s what High-Yield International’s Paul Tracy has to say about the matter:

“Let’s face it, the past 12 years haven’t been kind to American equities. In the dozen years ended September 30, 2012, the S&P 500 returned just 20%, including dividends. That’s equivalent to a pathetic 2% annualized return — not even enough to keep pace with inflation.

“Meanwhile, problems in Washington are only making matters worse. A ballooning national debt, the “fiscal cliff,” and billions of dollars in additional monetary stimulus have plagued the U.S. over the past few years.

“That’s one reason Standard & Poor’s decided to cut the United States’ coveted “AAA” credit rating last August. After the downgrade, the U.S. now sports a credit rating of “AA+,” the same rating as France and Austria.

“But while the U.S. government has struggled to rein in the out-of-control deficit spending that led to the downgrade, 13 other large countries across the globe have managed to keep their “AAA” rating intact.

“Of course, credit ratings aren’t everything. And two of the ratings agencies, Fitch and Moody’s, still designate the U.S. as an “AAA”-rated country. But it just goes to show there are plenty of other countries out there that are doing something right.”

Investors seem to reward that sort of fiscal responsibility too. Just look at what one of those 13 large “AAA”-rated countries — Canada — has been able to do over the last 12 years:

Since the beginning of the new millennium, Canadian stocks — as measured by the Toronto Stock Exchange Index — have returned over 180%… outperforming their American counterparts by over 160 percentage points.

And Canada isn’t the only “AAA” country that’s done well in the last twelve years… Australia has returned 44%… Hong Kong 99%… and Denmark a staggering 205%.

#-ad_banner-#But it’s not just the performance that makes investing internationally so attractive. As it turns out, many of the companies in most of these countries pay a lot higher dividend yields too. 

For example, the average yield for Canadian stocks is 3.0%. For Hong Kong it’s 3.3%, and for Australia it’s as high as 4.8%. 

These are the kinds of opportunities that investors are seeing overseas. As you can see, I’m not talking about investing in Chinese start-ups. I’m talking about investing in reliable companies that are operating businesses in dependable countries.

Don’t get me wrong, neither I, nor Paul, would suggest you dump everything you own and invest it in international stocks. The size and scope of the U.S. market still make it a great place look for income stocks. 

But it just goes to show that when it comes to dividends, the United States is by no means king. There are dozens of other countries in which companies are paying stable dividend yields… handing investors steady growth… and they’re just as safe — if not safer — as what you’ll find in the United States.

Action to Take –> Truth be told, there is a lot more to tell about investing in international dividend payers. For example, did you realize that there are 22 U.S. common stocks yielding 12%-plus (see the full list of all 22 here), but 133 such stocks abroad?

Paul has more on the yield discrepancy between U.S. and foreign stocks — including several more high-yield examples with names and ticker symbols — in this presentation. Click here to read it now.

[Editor’s note: A version of this appeared in StreetAuthority Insider, a subscriber-only publication sent to all StreetAuthority newsletter subscribers, free of charge.]