Highest Paying Dividend Stocks Could be Hurt by Fed's Rate Hike

Don't get too carried away by a stock's high paying dividend, especially as the Federal Reserve looks to raise interest rates. 'Within dividend stocks, don't necessarily just reach for the stocks with the highest paying dividend,' said Brian Levitt, senior investment strategist at OppenheimerFunds. 'Those will trade as bonds have traded - if interest rates rise, they're going to selloff and vice versa.' Fed Chair Janet Yellen told Congress last week that a 2015 rate hike is likely. Some of the highest paying dividend stocks in the Dow Jones Industrial Average include Chevron (CVX), which pays $1.07 a share per quarter and Verizon Communications (VZ), which returns $0.55. He says dividends do provide cushions during times of volatility, but investors should be looking for companies that are not only paying a dividend, but growing a dividend. TheStreet's Scott Gamm speaks with Levitt from New York.