Pick: Occidental Petroleum (OXY)
Bob Shearer loves dividends. The manager of the $20.7 billion BlackRock Equity Dividend Fund (MDDVX) is constantly prowling for high-quality, high-yielding stocks -- and he thinks Occidental Petroleum, which has a 2.6% yield, is a real find. Shearer, whose fund has returned 6.4% a year over the past decade, topping 99% of peers, admires Occidental's business model. The company drills mainly for oil, so it hasn't been hurt by low natural-gas prices. Like most producers, its stock has slipped recently because of falling oil prices. But with gaudy 44% operating margins, Occidental has a key advantage, in Shearer's view: It's expanding in California, where drilling costs are lower than in the oil sands or deepwater ocean. As a result, Occidental can keep pumping out healthy profits even if prices don't rebound.
--M.K.
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