The correct answer is     (B.) European telecoms

European telecoms are the highest yielding group among all 20 sectors in the Dow Jones Stoxx 600 Index. The 60 telecoms in the sector carry an average yield of 4.9% at the end of Q3 2009 (after withholding taxes). But that's just an average, and yields of 7%-plus can be found on individual telecoms such as Deutsche Telekom (NYSE: DT) and France Telecom (NYSE: FTE).

That's attractive, but it gets better. The group is also known for its dividend growth record. Thanks to steadily increasing payouts during the past few years, telecom yields have grown from an average 3% in December 2005 to nearly 5% today, an IndexUniverse study shows.

What fuels those generous payouts? You and I do, along with millions of other customers like us around the world who chalk up big bills each month for an ever-expanding array of seemingly indispensable services -- from broadband Internet to cell phones, and the latest smartphones. That's enabled the industry to grow by leaps and bounds, fueling more returns.

Growth takes capital, however, and telecoms with the strong balance sheets are positioned to stay ahead. But with so many choices, it's not easy to select today's top picks, which is why StreetAuthority editor Carla Pasternak dove deep into the world of European telecoms in search of the best income investments. In the latest issue of her High-Yield International newsletter, Carla talks about the deals she uncovered and provides an in-depth look at two specific telecoms with rich yields and strong fundamentals. Both have maintained the number one share in their markets by staying competitive and keeping debt at reasonable levels. Moreover, each is a shareholder friendly company that has consistently allocated the ample free cash flow they generate to grow the dividend. To learn the names of Carla's picks, and to learn more about High-Yield International, please visit this link.