Financial and technology companies may not pay the biggest dividends right now, but they have large amounts of cash on their balance sheets. That means they are in a position to pay more money to shareholders.
Technology companies in the S&P 500 have $419 billion of cash on their balance sheets, accounting for about 40 percent of all cash held by S&P 500 companies, according to S&P Capital IQ data.
"Give me a balance sheet that's full of cash," says Morrow.
Take Apple. The technology giant said April 23 that it would distribute $100 billion to its shareholders by 2015, some of it in the form of higher dividends.
Technology companies haven't been the biggest dividend payers in the past. Currently, they pay average dividends of just 1.4 percent, but the trend is for higher payouts.
In 2004, tech companies in the S&P 500 paid just 0.3 percent. That trend is likely to continue as income-hungry investors put more pressure on companies to pay dividends.
BOND YIELDS ARE EDGING HIGHER
Rising interest rates are bad for stocks that pay big dividends. When long-term interest rates start to rise, bonds start looking attractive again to investors who are looking for income. That diminishes the appeal of defensive stocks.
Bond yields have risen this month on speculation that the Fed is considering easing back on its stimulus program as the economy improves. The Federal Reserve is spending $85 billion a month on buying bonds to push down interest rates.
The yield on the 10-year Treasury note rose to 2.03 percent on Wednesday, close to its highest level of the year, after minutes of the Fed's meeting earlier this month showed that some policymakers favored cutting back on stimulus as early June. The yield has climbed from 1.63 percent on May 3, its lowest of the year, before the April jobs report was published.