Dividend stocks for second-quarter playbook, says pro

As investors adjust their playbook for the second quarter, they should look at dividend-paying stocks, market expert Mark Luschini said Friday.

That's because with the market trying to predict when the Federal Reserve will raise interest rates, and the Fed trying to predict the economy, the market is in a delicate state and will react strongly to any news, he said.

"We expected more volatility in 2015. We had it earlier this year. We expect more of the same later this year, particularly as the Fed starts to shift its interest rate policy," the president and chief investment officer of Janney Capital Management said in an interview with "Power Lunch."

That said, he believes the market will ultimately end higher for the year, although he expects the gains to be in the mid- to single-digits at best.

A pedestrian walks past a McDonald's restaurant in Tokyo.
Kiyoshi Ota | Bloomberg | Getty Images
A pedestrian walks past a McDonald's restaurant in Tokyo.

Luschini thinks equities that pay dividends are a good option for those who want lower risk in their portfolios but want to wait for interest rates to settle before getting into bonds.

Read More Why I'm feeling much better about stocks: Siegel

Specifically, he likes McDonald's and General Electric.

McDonald's is a "dividend aristocrat," consistently raising dividends for the last 38 years, Luschini said.

"We think there's an opportunity to, if you will, repurpose McDonald's, to make it cool again in the sense of being able to draw back some of that migration away from its menu to the fast casual restaurants."

That, combined with paring down its menu, could boost same store sales, he said.

The fast-food chain's stock currently pays out 3.5 percent dividend.

Read MoreHere's where to go amid this volatility: Calamos

As for General Electric, which pays out a 3.7 percent dividend, it is "pretty cheap" compared to its peers in the market, Luschini said.

"As a consequence of the redo of its portfolio businesses, including energy, we think long-term power generation, infrastructure and energy are going to be powerful themes to drive GE forward."

—CNBC Jackie O'Sullivan contributed to this report.

Disclosure: Luschini owns McDonald's and GE. His clients own MCD and GE in a fund.