Dividend Stocks Better Investment than Bonds: Pros

Stocks advanced Wednesday, boosted by positive corporate news, but a rise in bond yieldsand the dollarlimited gains. Robert Millen, co-portfolio manager of the Jensen Portfolio at Jensen Investment Management, and David Joy, chief market strategist at Columbia Management, shared their best plays.

“We like companies that are very entrenched competitively, have global franchise, generate lots of cash and use the cash to make acquisitions, buy back shares and pay a dividend,” Millen told CNBC.

“And we think dividends may play a bigger part of return going forward in the next 10 years.” (Scroll down for his full list of picks.)

In the meantime, Joy said dividend stocks are much more attractive compared to bonds, and also act as an incentive for getting retail investors back into the market.

“They’ve been scared away by the two downturns in the last 10 years and the certainty of a dividend yield may be the key to get them back in again,” he explained. “We like the equity markets for next year.”

Millen Likes:

3M

PepsiCo

United Technologies

Joy Likes:

Costco

HJ Heinz

Gilead Sciences

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Scorecard—What They Said:

• Joy's Previous Appearance on CNBC (Nov. 3, 2010)
• Millen's Previous Appearance on CNBC (Dec. 16, 2010)

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More Market Intelligence:

• Markets Are Still Below Fair Value: Stock Picker
• Citi a Value Play — Here's My Price Target: Kotowski
• Consumers Will Drive Markets in 2011: Strategist

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CNBC Slideshows:

• Disappearing Tax Cuts

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CNBC Data Pages:

• Dow 30 Stocks—In Real Time
• Oil, Gold, Natural Gas Prices Now
• Where's the US Dollar Today?

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Disclosures:

No immediate information was available for Joy or Millen.

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Disclaimer