While investors can get market yields with ETFs or better-than-market yields by owning certain funds, for stock pickers, not all sectors are created equal.
A number of industries have been driven up in value by investors, both income-seeking and not. Pharmaceuticals, for instance, is one area that Jörg de Vries-Hippen, chief investment officer of European equities with Allianz Global Investors, is staying away from.
The health-care space in general yields about 2.4 percent, which isn't good enough for him. As well, many companies are expensive. It's a similar story for consumer staples stocks, which are yielding, on average, 2.7 percent.
"Some of these are good companies, but the dividend they pay on these valuations are too low," he said.
He does like European reinsurance companies, like Munich Re, which is in his top 10 holdings, because they tend to have high and stable cash flows and clear business models. Their growth opportunities are limited, too, so they'd rather pay out profits than hang on to cash for no reason.
There are also good opportunities in European oil companies, he said. Many are cheaper than they have been because of the oil price drop, and they've also been forced to fine-tune their balance sheets. While this sector could be bumpy in the short term, when oil rebounds, these operations will be in a better payout position.
Royal Dutch Shell, which purchased BG Group for $70 billion on April 8 and has been paying a dividend since the end of World War II, is also one of the top holdings in Vries-Hippen's Allianz European Equity Dividend fund.