CNBC Stock Blog

9 Winning Dividend Stocks: Strategists

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Dividend stocks are slowly making a comeback, so which ones should investors watch for? Michael Farr, president of Farr, Miller & Washington and CNBC contributor, and Jeffrey Kosnett, senior editor at Kiplinger’s Personal Finance, shared their best plays.

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Dividend Plays for Small Investors

“The great opportunity is not only in underpriced stocks, but in underpriced stocks with dividends,” Farr told CNBC.

“But you have to be a little careful, because with tax law changes and Medicare surtax on all types of income coming up, dividends may be a little less attractive in the future.”

However, Farr warned that small investors shouldn’t be focused entirely on dividend stocks.

“In fact, if you see dividends over 10 percent, that’s a real warning sign of risk,” he said. “If you find balance sheets with strong earnings where the dividend is a reasonable part, those companies can hold up longer.”

In the meantime, Kosnett told investors to look for companies with a history of regularly boosting dividends by at least 10 percent annually.

“I think dividends remain a good deal,” he said.

Farr Likes:

Johnson & Johnson

ExxonMobil

P&G

Kosnett Likes:

Cardinal Health

Praxair

Yum Brands

Activision Blizzard

Century Tel

Texas Instruments

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Disclosures:

No immediate information was available for Farr or Kosnett.

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