CNBC commentator Jim Cramer recommends six dividend stocks to withstand tax increases coming from healthcare reform and other White House proposals.
The healthcare plan entails capital gains and dividend tax increases for wealthy investors.
“Now, Cramer always has recommended dividend stocks as great protection against economic and market volatility,” notes CNBC.com.
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“But if investors are pocketing less money as a result of higher taxes, then this strategy has to change.”
The solution: bigger dividends, Cramer says. Here are his picks.
• BP (British Petroleum). “Cramer likes the expected cost cuts and the growth.”
• DuPont. “What was once a play on housing, and even pharma, is now an investment in emerging markets.”
• Kinder Morgan Energy Partners. “This natural-gas pipeline play isn’t exposed to the commodity’s prices, which is why Cramer likes it so much.”
• Verizon Communications. “Cramer wanted a utility in his basket. . . . He thinks there’s a good chance Verizon will boost its dividend.”
• Eli Lilly. “This company has increased its dividend for 42 straight years.”
• Altria Group. “Altria is Cramer's alternate for the group. The cigarette maker is a less politically correct play than DuPont, but it yields 6.8 percent.”
Cramer isn’t the only one who likes dividend stocks.
“The historical evidence I’ve examined shows high dividend, high yielding stocks outperforming the market in the long run,” Jeremy Siegel, the renowned University of Pennsylvania stock guru, said in an interview with MoneyNews.com.
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