Power Lunch

Monday - Friday, 2:00 - 3:00 PM ET

Power Lunch

Power Play: Stay competitive with dividend stocks

A customer enters their pin number while making a chip and pin payment using a Visa payment card.
Simon Dawson | Bloomberg | Getty Images

Stocks are flat on Monday, with investors focusing on the Fed and the probability of an interest rate hike in June.

Kate Warne, investment strategist at Edward Jones, tells CNBC's "Power Lunch" she expects modest economic growth and the Fed will likely raise interest rates once or twice this year.

In this environment, Warne is recommending stocks that are well-positioned due to their strategic competitive advantages.

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One of her top picks is Visa. "We expect Visa to benefit as consumers shift to plastic from paper. It's recent acquisition of Visa Europe should improve earnings growth," Warne said.

Another key factor is Visa's dividend. "It's trading at 28x 2016 EPS with 12 percent expected dividend growth and a yield of 0.7 percent," Warne said.

Visa is lower during trading, but is up 11 percent over the past year.