What’s the first thing that pops into your mind when you hear “Standard & Poor’s”? It’s likely the benchmark S&P 500 Index.

But there’s so much more that Standard and Poor’s has to offer.

A couple of weeks ago I told you about the S&P’s High Yield Dividend Aristocrats Index, an income index that has outperformed the S&P 500 for a decade. But what else does Standard and Poor’s have up their sleeve, especially for us income investors?

How about one of the greatest tools you can use to uncover international income investments?

The Smart Way to Find International Income
It pays to look abroad for income investments. According to Bloomberg, nearly 240 foreign companies have yields between 12-25% and were profitable during the past 12 months. Compare that to the 24 such companies found in the United States. But even if you know you should be looking abroad for income, figuring out a good place to start your search is a trial in of itself.

Why not let Standard and Poor’s give you a head start? That’s where the S&P International Dividend Opportunities Index comes into play.

The index is your ticket to 100 of the highest-yielding stocks from outside of the U.S. To make the index, companies must trade on a major exchange and have a market cap of at least $1.5 billion, with average daily trading volumes of at least $5 million.

Companies also have to demonstrate a proven ability to pay dividends. All stocks must have positive earnings growth during the past five years, and all stocks must have been profitable during the past 12 months.

Once chosen, the highest-yielding stocks carry the largest weightings and no one country can represent more than 25% of the index. Top countries on the list make up a “who’s who” of international income nations. More than 50% of the index’s value as of the end of September was made up by Australia, Canada, Italy, Spain and France.

But does the index’s strategy of selecting foreign dividend payers actually work?

In a word, yes. On top of an average dividend yield of 7.8% (as of June 30th), it has averaged a stellar return of +13.9% annually during the past 10 years. This blows away an average annual return of -0.15% during the same period for the S&P 500. Year-to-date returns through September 30th are equally sharp: +60.5% for S&P International Dividend Opportunities Index versus +19.3% for the S&P 500.

If you simply want to track the performance of this index, it’s as easy as can be. The SPDR S&P International Dividend ETF (NYSE: DWX) is an ETF that tracks the index step for step.

But there is another, more lucrative way you can use the S&P International Dividend Opportunities Index to your advantage.

In the hunt for higher yields, you can replace the common shares listed in the index with a higher-yielding preferred stock or an exchange-traded bond that a member company may have issued. For example, Bank of Montreal (NYSE: BMO) has a great long-term dividend track record and a hefty yield of about 5%. But the company’s U.S. subsidiary, Harris Bank (NYSE: HBC-P), also issued preferred shares denominated in U.S. dollars that are now yielding over 8%.

There is one caveat to watch for. For companies included in the index, yields are calculated on a trailing 12-month basis, so you need to check out how the dividend is faring today. For example, U.K. banking giant Barclays ADR (NYSE: BCS) was recently assigned top billing before the portfolio was rebalanced. It did indeed carry an incredible trailing 12-month yield of 14.4% and met all of S&P’s profitability requirements, but the company suspended its dividend during the financial crisis.

A quick check of the current payment can ensure you sidestep this easy-to-spot pitfall.