NEW YORK (TheStreet) -- An increased amount of pressure will be placed on high-yielding stocks when the Federal Reserve raises interest rates, Stifel Nicolaus portfolio manager Chad Morganlander explained.
"It's a case-by-case issue here. Investors have been looking at high-dividend paying stocks as a bond-like alternative," he said during Wednesday's "Power Lunch" on CNBC.
He urged investors to avoid utilities and energy stocks as rates begin to increase.
"What we would be buying are companies that are dividend growers where top-line revenue growth is robust, where predictability of operating margins and gross margins are substantial," he stated.
He pointed to Pfizer (PFE) and Church & Dwight (CHD) as two stocks investors should look to if interest rates are raised.
Pfizer because "they have long-term forecasted growth rate on the top-line of 3% to 5%, that's all you need to hit a price target of $40 per share," Morganlander noted.
Church & Dwight because of its top-line growth of 5% and dividend growth of roughly 10%, he added.
(Pfizer is held in the Dividend Stock Advisor portfolio. See all of the holdings with a free trial.)