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Power Play: Betting on out-of-favor stocks

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Stocks are rallying on Monday, with the Dow and S&P 500 moving out of a correction. But year-to-date, the Dow and S&P are still down more than 4 percent.

Burns McKinney, portfolio manager at NFJ Investment Group tells CNBC's "Power Lunch" the recent pullback has created value in the market.

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"Equities shouldn't generate double digit returns, but with stocks yielding this much more than treasuries, they look good compared with fixed income, " McKinney said.

Two out-of-favor names McKinney likes right now are Wal-Mart and Quest Diagnostics.

"We are looking for companies with attractive dividends, with pricing power to keep growing payouts," McKinney said.

Wal-Mart is down 22 percent over the past year, while Quest Diagnostics is off 7 percent.