Top Dividend Picks From Top Pros

When identifying dividend opportunities, Meggan Walsh doesn't put high payouts first. Instead, she focuses on total return, the combination of a stock's dividend and its change in share price. "We want companies with at least 35% total return over two or three years," she says. She seeks firms that are profitable and generate a lot of cash -- signs, she says, that the dividend can increase and the business has room to grow.

Walsh has been investing heavily in consumer staples, like food and hygiene companies. Stocks in the sector have been flattened by rising commodity prices (investors worry grain costs could hurt cereal makers). "But these companies typically can pass price increases on to consumers," Walsh says. She also likes large regional banks, which she says are trading for less than their worth if liquidated. But act fast if you want to follow her lead, she warns: "Historically these have rebounded well before economic conditions turn."

Source: CNN Money

Related Articles:
- Four Dividend Stocks Stepping Up In The Downturn
- Increasing Dividend Yield Part VI: Time
- Increasing Dividend Yield Part V: MLPs
- Increasing Dividend Yield Part IV: Bonds
- Increasing Dividend Yield Part III: Preferred Stock