Trillions Could Rotate into Dividend Payers: Pro
In the latest Fast Money portfolio, the gang turns to BlackRock president Rob Kapito for long-term ideas in this volatile world.
With $3.5 trillion under management, Kapito is always watching for opportunities in the market . And tells us he sees every reason for dividend paying stocks to go higher.
“$10 trillion is sitting in bank accounts – and at these low rates,” he says. Eventually he thinks people will grow tired of earning almost nothing on their savings. “If only 10% of that money comes out of banks – that’s $1 trillion that could go into the market,” he says.
And Kapito think the most likely place for that money to go is into investments that generate income.
Although he thinks commodities, real estate and MLP’s will all benefit, he’s particularly enthusiastic about dividend-payers. "We love the equity dividend story," he says. "Companies are the beneficiary of low rates, so what are they doing, they're raising dividends and buying back stock."
And Kapito thinks the trend is picking up steam. “It’s happening everywhere” he says.
As a result, he recommends putting money to work in dividend funds. “On average you get 4-5% he says.
Or if you’re looking for individual names, “Merck , Pfizer , Verizon , and Johnson & Johnson are all yielding between 3-5%. There are lots of opportunities,” he says.
*You can find our conversation with Kapito about 6 minutes into the video clip above.
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Trader disclosure: On Mar 19, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long SPY; Karen Finerman is long IWM; Karen Finerman is long MDX; Karen Finerman is long FRO; Michael Murphy is long ANF; Michael Murphy is long JOYG; Michael Murphy is long SBUX; Michael Murphy is long PHM; Tim Seymour is long INTC, Tim Seymour is long CSCO, Tim Seymour is long YHOO; Tim Seymour is long CSCO; Tim Seymour is long YHOO; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU
For Doug Kass
Doug Kass is short AAPL
For Colin Gillis
CNBC.com with wires.