Even though U.S. blue chips like PepsiCo (NYSE: PEP) and Colgate-Palmolive (NYSE: CL) have helped investors accumulate fortunes in the past, the temptation to look abroad for the world's best dividend stocks remains strong.

For one, many foreign stocks offer higher dividend yields than their U.S. counterparts. For example, U.K. hotelier InterContinental Hotels Group (NYSE: IHG) doles out a 1.5% dividend, versus U.S.-based Wyndham Worldwide's (NYSE: WYN) 0.7%.

Not all created equal
Despite the tremendous opportunities available to generate income from companies abroad, stateside investors need to know about a couple of things before stamping their passports:

  • Dividend regularity. Or lack thereof. Foreign-company dividends might be larger than U.S. companies', but they're often less regular in timing and amount. Companies abroad like to pay a target percentage of earnings instead of a certain "dollar" value every year. Don't knock it: Freed from the pressure to lowball their payouts, these companies can pay you more over the long haul.
  • Dividend taxation. Foreign countries (except for countries of the U.K.) will scalp your scratch at their going rate. Still, most countries in which you're likely to invest have tax treaties with the United States, which means that you can claim a credit for the tax withheld. Here's the rub: Because a credit offsets taxes you would have otherwise paid, it's smart to hold foreign stocks in a taxable account. In other words, skip the IRA if you're going abroad.

Of course, not all foreign dividend stocks are created equal. So each week, we'll highlight a five-star foreign dividend payer with the assistance of the 83,000 investors participating in Motley Fool CAPS, the Fool's free investing community. After all, having a second (or 300th!) pair of eyes can help you separate the wheat from the chaff.

Irish eyes are smiling
The past year has been rough for most major financial firms, and two-time Motley Fool Global Gains pick, Allied Irish Banks (NYSE: AIB), isn't an exception -- over the past year, the stock has dropped 24%. Nevertheless, CAPS investors say the Dublin financier deserves your attention.

For an opinion of how Allied Irish Banks will perform going forward, here's a bullish pitch from the Fool's own TMFMossBeliever, made a bit more than two months ago:

The Irish economy has slowed significantly from recent strong growth which will obviously hurt a bank's growth prospects, but the quality of this bank's assets reassures me and I am confident they will come out the other side of this slowdown in good shape.

On the other hand, Allied Irish Banks bear belleei isn't so sure that the stock will be steady in the midst of economic uncertainty. In December, belleei called into question the company's relationship with M&T Bank (NYSE: MTB), which itself is having trouble emerging from the subprime muck and mire:

[Allied Irish] through its US Allfirst subsidiary has a 22.5% interest in M&T Bank. As M&T's parent, AIB is obligated to capitalize M&T should become financially stressed. M&T has been adding risky loans to its portfolio and there is exposure to residential construction lending. In the short term I think we see this stock decline as investors factor this into their considerations.

Overall, CAPS investors tend to agree with TMFMossBeliever's bullish opinion: Of 878 investors who have rated the stocks, 859 think Allied Irish Banks will outperform the market going forward.

In this Fool's opinion, Allied Irish Banks is a worthy candidate for further research if you are looking for either dividend income or foreign exposure, or both. In addition to currently yielding 3.5%, the stock has solid exposure to Eastern European emerging markets like Poland. 

What do you think about Allied Irish Banks or any stock, for that matter? Make your voice heard on Motley Fool CAPS today. 

For the record, Fool contributor Todd Wenning's favorite Philly cheesesteak is not Pat's or Geno's -- it's Larry's on 54th and City Avenue. He does not own shares of any company mentioned. The Motley Fool owns shares of Allied Irish Banks. Intercontinental Hotels is a Global Gains choice. Colgate-Palmolive is an Inside Value pick. The Fool's disclosure policy is going streaking on the quad.