Is there such a thing as a safe dividend yield? RNC Genter Capital Management's Dan Genter says an investor should look not to the size of the dividend, not even in relation to the stock price — but to consistency.
"The key here is going to the areas that may not be the sexiest, they may not be the fastest earnings growers, but they're going to be more consistent," he told CNBC. "Those are going to be the traditionally defensive areas: Consumer staples, utilities, telecom, I'd even throw energy in that mix right now, health care."
Genter says a lot of companies in those areas are showing yields of 5 or 6 percent.
In pharma, he likes Eli Lilly, Pfizer, and Merck.
"All three of those stocks are paying in the 5 percent area," he said.
His telecom dividend champions are AT&T and Verizon.
"AT&T is paying a 7.2 percent dividend, (Verizon) paying 6 percent," he said.
Wait. There's more.
Consumer Staples & Tobacco Picks
Consumer Staples & Tobacco Picks:
"There's a number of very strong companies," he said.
"In the staples area, Procter & Gamble; some of the old tobacco companies, with Altria here in the U.S., and the European counterpart Philip Morris, that's an 8.2 and 6.2 percent yield, with plenty of free cash flow to cover it."
- Watch the entire Genter interview
Disclosure information for Dan Genter was not immediately available.
- Dow 30 Stocks — in Real Time
- Gold, Oil, Silver, NatGas Prices Now
- After Hours: Check Futures/Pre-Markets Here