Johnson & Johnson, Pfizer Good Stock Buys in Pricey Market

Mark Spellman, portfolio manager at Alpine Equity Income Fund, says Johnson & Johnson (JNJ) and Pfizer (PFE) are good stocks to own in a market that he believes is currently overvalued. He says both companies have excellent balance sheets, lots of free cash flow, reasonable multiples, and attractive payout ratios. He says both companies will continue raising their dividends every year and have the money to make acquisitions, as well as the discipline not to overspend on a deal. He also likes Zimmer Holdings(ZMH) which is close to finalizing its acquisition of Biomet(BMET). He says Zimmer is a good buying opportunity right now and the combined company has strong revenue growth in front of it. He spoke with TheStreet's Rhonda Schaffler.