Many companies are announcing dividend hikes this month—a reversal from last year and the year before. So where should investors place their money? Jeff Krumpelman, dividend growth portfolio manager at Hilliard Lyons Capital Management, and Stanley Nabi, chief strategist at Silvercrest Asset Management, offered their best dividend plays.
“What you will have is a very substantial dividend increase over the next 2 to 3 years,” Nabi told CNBC.
“The American companies, non-financials, have $1.1 trillion in cash on their balance sheets and their cash flow exceeds their capital spending, so they don’t need all that money on their balance sheets.”
Nabi said dividend investing is a good strategy for investors now. (Scroll down to see his top picks.)
In the meantime, Krumpelman said he expects a 25 to 30 percent growth in earnings this year, which will lead to more firms raising their dividends.
“These are also companies that are globally postured," he added. "When growth is scarce and you do have pressure—these are companies that have global footprints, armored balance sheets, and are in better shape than many sovereign countries,” he said.
Krumpelman also said the dividend-hikers are expected to see jobs growth in the near future.
“These are companies that have the cash on the balance sheet so they can do M&A. They are exposed internationally where there’s growth and they’ll be the first, therefore, to be able to rehire and take share from companies that have gone out of business," he said. "So these are companies that will be rehiring.”
Krumpelman’s Dividend Plays:
Nabi’s Dividend Picks:
Johnson & Johnson
Marsh & McLennan
More Market Opinions:
CNBC Data Pages:
No immediate information was available for Krumpelman or Nabi.