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Investors in pursuit of sustainable top dividend yields can find investment ideas by browsing through the picks of different dividend indices, mutual funds, and exchange-traded funds. The iShares Dow Jones Select Dividend Index Fund (DVY) is one such fund, the first dividend-focused ETF that Barclays Global Investors (now part of BlackRock Inc.) brought to market in 2003. The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Select Dividend Index, which represents the leading U.S. stocks by dividend yield. The index consists of a hundred stocks that are selected based on their dividend yield, subject to screens for dividend growth rate, dividend payout ratio and average daily dollar trading volume.

The iShares Dow Jones Select Dividend Index Fund has a high dividend yield of 4.0%. The fund assesses a management fee of 0.4%. A third of the fund's value is concentrated in the stocks of the utilities sector. Over the past year, the fund has returned 16.6%. Since its inception date, the fund has returned, on average, 11.44% per year, beating the broader market. For investors interested in specific dividend stocks, here is a closer look at five of the largest holdings in the iShares Dow Jones Select Dividend Index Fund.

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Lorillard (LO) is a $16-billion cigarette maker, marketing brands such as Newport, Maverick, and Kent. The company has a dividend yield of 5.2% on a payout ratio of 76%. Its peers Altria Group (MO), Reynolds American (RAI), and Philip Morris International (PM) pay dividend yields of 5.3%, 5.4%, and 3.7%, respectively. Lorillard's quarterly dividend has increased cumulatively by 168% since initiation in August 2008. This year, Lorillard boosted its quarterly dividend by 19.2%. The company's EPS grew at an average rate of 11% per year over the past five years and is forecast to expand at a 9.2% annual rate for the next five years. Notwithstanding the weakening economic conditions, the cigarette makers have a strong brand power and the capacity to raise prices. As for its valuation, on a forward P/E basis, Lorillard is trading at a discount to the tobacco industry. The stock is changing hands at $122.44 a share, up 9.5% over the past 12 months. Value investor Jean-Marie Eveillard (First Eagle Investment Management - check out its top picks) and quant king Jim Simons are big fans of the stock.

Lockheed Martin Corporation (LMT) is a $29-billion aerospace, defense, and security company. It is the U.S. government's largest defense contractor by revenues. The company pays a high dividend yield of 4.3% on a payout ratio of 47%. It is an attractive dividend growth play. Over the past five years, Lockheed Martin grew its EPS and dividends at average rates of 6.3% and 23.4% per year. The company is expected to boost its EPS at an average annual rate of 7.1% for the next five years. The forecast EPS growth is moderate given concerns that fiscal spending on defense programs will shrink in the coming years amid budget austerity. The company has a free cash flow yield of 2.5% and an exceptionally high ROE of 102%. In terms of valuation, on a forward P/E basis, the stock is trading at a discount to the aerospace industry and the industrials sector. Over the past 12 months, the stock is up 20% to $91.29 a share. Among fund managers, Jean-Marie Eveillard and John Shapiro (Chieftain Capital) are major investors in the company.

Chevron Corporation (CVX) is a $231-billion integrated oil and natural gas giant. The stock, which recently reached an all-time high, is yielding 3.1% on a low payout ratio of 27%. Its main competitors Exxon Mobil (XOM) and ConocoPhillips (COP) are yielding 2.5% and 4.6%, respectively. Over the past five years, the company's EPS expanded at an average rate of 11.5%, while its dividend increased at an average rate of 9.2% per year. This year, the company boosted its dividend by 11%. Analysts at Oppenheimer consider that Chevron is "the most leveraged integrated oil company to oil prices." Thus given the expectations that oil prices will hit a record level on average for the year, the stock is likely to extend its rally further. Chevron's stock has a negligible debt-to-equity ratio, a free cash flow yield of 2.4%, and ROE of 22%. As for its valuation, on a forward P/E, the stock is trading on par with its respective industry and below its main industry rivals. The stock is changing hands at $117.8 a share, up 18.2% over the past 12 months. Chevron is popular with Phill Gross (Adage Capital), Jim Simons, and Cliff Asness.

CenturyLink Inc. (CTL) is a $26-billion integrated telecommunications company in the United States, and a leader in cloud infrastructure. It pays a high dividend yield of 6.9% on a payout ratio of 345% of trailing earnings and 74% of last year's free cash flow. While the company currently generates sufficient free cash flow to cover its dividend payouts at current levels, the company's debt has swollen, which could threaten the safety of the CenturyLink's dividend in the future. For the reference, the company's peers AT&T (T) and Verizon Communications (VZ) pay dividend yields of 4.7% and 4.6%, respectively. Over the past five years, CenturyLink's EPS contracted at an average rate of nearly 19% per year, while dividends have been flat since 2010. Analysts forecast EPS growth averaging close to 6.0% per year for the next half decade. The stock has a high debt-to-equity ratio of 106% and low ROE. As for its valuation, on a forward P/E basis, the stock is priced slightly above its respective industry and AT&T, and on par with Verizon. Over the past year, the stock is up nearly 20% to $41.89 a share. CenturyLink was a new addition to Jim Simons' equity portfolio in the second quarter.

Kimberly-Clark Corporation (KMB) is a $34-billion consumer goods company, selling mainly paper products. The company pays a dividend yield of 3.5% on a payout ratio of 65%. Its competitors Procter & Gamble Co. (PG), The Clorox Company (CLX), and Colgate-Palmolive (CL) pay dividend yields of 3.2%, 3.6%, and 2.3%, respectively. Over the past five years, the company's EPS and dividends grew at average rates of 4.2% and 7.1% per year, respectively. Analysts forecast that the company's annual EPS growth will double for the next five years. Kimberly-Clark has a free cash flow yield of 1.4% and a ROE of 32.7%. The company has shown strong earnings performance, driven by organic sales growth, cost savings, and lower commodity prices. It has recently guided higher for the year and boosted its 2012 share buyback program. As for its valuation, on a forward P/E basis, the stock is trading at a discount to its respective industry. The shares are trading at $85.32, up 22.3% over the past 12 months. Billionaires Ken Griffin and Cliff Asness are major investors in the company.

Source: Top 5 Dividend Picks In The Dow Jones Select Dividend Index Fund