Investors should be wary of companies that pay dividends out of a dwindling supply of money, according to Randall Eley of The Edgar Lomax Company.
In an interview with CNBC, Eley advised long-term investors to focus on stocks that are not overvalued and have strong balance sheets, without a lot of debt.
While the Federal Reserve is removing the biggest punch bowl in American history, Eley believes the United States will survive the banking crisis.
He cautioned against companies struggling to access finance in the current market, but highlighted Exelon, General Dynamics, and Pfizer as examples of companies that can provide capital in distressed situations.
Investors should also separate companies with strong financial positions from those paying dividends out of a dwindling supply of money.
Eley warned that many companies are now struggling to get access to finances, which is causing them to realize they cannot borrow the kind of money they could even a year ago.