Jim Cramer

Jim Cramer’s Top High-Yielding Stocks

I am not familiar with how each of the stocks below trade, so am not recommending any of them.  But I like the way Mr. Cramer looks at each of them. 
One thing that is often overlooked: while you can certainly look at dividend payments as a buffer against capital loss (as Cramer does here), you can also use them as a technical indicator.  Look for upcoming post on the mechanics of doing that very thing.

Published: Wednesday, 9 Nov 2011 | 7:34 PM ET
By: Drew Sandholm Producer

For investors looking for protection from a chaotic market environment, Cramer on Wednesday outlined his top high-yielding stocks.

Windstream[WIN  11.86    0.07  (+0.59%)   ]: This rural telco provider’s stock sports an 8.5 percent dividend yield. While Windstream’s wire-line phone business is in decline, the company has been focusing on areas of growth, such as broadband and business services. Of Cramer’s top high-yielding stocks, he said Windstream’s dividend is the least safe, even though it has enough free cash flow to cover the payout. For investors looking for a safer play, though, he suggests Verizon[VZ  37.39    0.50  (+1.36%)   ].

Solar Capital[SLRC  23.41    1.07  (+4.79%)   ]: This specialty lender’s stock pays a massive 10.7 percent dividend yield. Cramer would typically view a yield that high as a red flag, but this is a special case. As a business development company, Solar Capital lends money to small- and medium-sized companies that are too tiny or risky for most people to invest in. Solar Capital then returns 90 percent of its profits to shareholders by way of a huge dividend, Cramer explained. He likes the stock at current levels.

Energy Transfer Partners[ETP  43.3999    0.5299  (+1.24%)   ]: This pipeline master limited partnership yields 8.3 percent. Cramer thinks of this company as a “steady toll operator for moving oil and gas around.” Thanks to recent oil and gas discoveries, demand for new pipe has skyrocketed, benefitting ETP. Some investors are upset that the company did a massive stock offering that knocked its stock price down, but Cramer sees it as an opportunity to get shares at discount.

American Electric Power[AEP  38.83    0.40  (+1.04%)   ]: This utility company is committed to paying out higher dividends, Cramer said, and the stock already has a 4.9 percent dividend yield. American Electric Power is one of the U.S.’s top generators of electricity and has the country’s largest transmission system. Cramer prefers this utility to others, though, because he thinks its utility portfolio is among the strongest in the country and it provides power to the “Heartland” where manufacturing is “very strong.”

Sanofi[SNY  33.49    0.63  (+1.92%)   ]: This drug company pays a 5.4 percent dividend yield. Cramer likes Sanofi because it’s a defensive play that doesn’t need a growing economy for business to be good. In addition, it has the lowest exposure to Medicare of any big pharma company. So any potential cuts U.S. lawmakers make to the program are less of a concern. Meanwhile, the company is moving into faster growing areas, such as vaccines, diabetes, generics and more.

Read on for Cramer’s Top Dividend Stocks 2011




When this story was published, Cramer’s charitable trust owned Sanofi.

Thursday, November 10th, 2011 Education, Jim Cramer, Stock Trading No Comments

Cramer: Enbridge: The Pipeline Play

Jim Cramer provides some welcome insight into a stock play which leverages oil without directly trading either the commodity or the big oil companies themselves. Take check it out.

Friday, September 16th, 2011 Commodities, Jim Cramer, Stock Trading 1 Comment

Cramer: Off the Charts: Tech-Buying Season

Jim Cramer does a decent job of analyzing the relative performance of SOXX vs. QQQ, and discussing what that might mean for the next few weeks / months in the tech markets.

Wednesday, September 14th, 2011 Education, ETF, Jim Cramer, Stock Trading No Comments

Cramer: Dividends Trump Buybacks

Published: Monday, 12 Sep 2011 | 7:41 PM ET
By: Michelle Fox
Web Producer

Stock buybacks are often like pouring money down the drain, Cramer said Monday. He thinks dividends are a much better way of returning capital to shareholders.

“Dividends put money right in your pocket,” he said. “Buybacks are supposed to help support the share price, but when you look at the actual results, the idea that most buybacks return anything to shareholders has begun to seem nothing short of fanciful.”

To prove his point, the “Mad Money” host took a look at the companies he calls the most egregious users of buybacks—Cisco[CSCO  16.09  ---  UNCH  (0)   ], Wal-Mart Stores[WMT  51.39    -0.43  (-0.83%)   ]and Exxon Mobile[XOM  71.27    -0.57  (-0.79%)   ].

Over the last five full fiscal years, Cisco spent $36.4 billion buying back stock, yet its share price still dropped by 10.7 percent. If the company had returned that money to shareholders in the form of a dividend, Cramer said, it would amount to $5.97 a share in dividends over that time period. Assuming the stock’s performance was the same, and not a 10 percent loss, you would have had a 22.3 percent gain.

Wal-Mart spent $35 billion buying back stocks, which Cramer said would have translated into $8.33 a share in dividends. The retailer is up 15 percent over the last five fiscal years, or 27 percent including the company’s current dividend program. Assuming Wal-Mart shares delivered the same performance instead of a 27 percent gain, shareholders would have seen a 33 percent return if the buyback money went to dividends.

And finally, Exxon Mobile spent $130 billion on buybacks during the five year period, which is enough money to have covered $21.31 per share in dividends. The company gave shareholders a 45 percent return, including dividends, during that period. But if it had not bought back stock and instead boosted the dividend, assuming the stock went up the same amount, shareholders should have gotten a 68 percent gain.

Cramer also likes that dividend yields get bigger as a stock goes down. But when a company buys back stock and the share prices go down, he said, there is no benefit.

What’s more, short-sellers hate to bet against stocks with dividends because when they borrow shares in order to short them, they have to cover the dividend payments as well.

“All a buyback really seems to do [is] give management the ability to shrink the share-count in order to produce, I think, artificial earnings beats,” Cramer said. “Shame on those who keep buying back their stock in light of these very telling numbers.”







Tuesday, September 13th, 2011 Education, Evergreen, Jim Cramer, Stock Trading No Comments

Jim Cramer: Where Is the Market Going Next?

Published: Tuesday, 6 Sep 2011 | 6:59 PM ET
By: Drew Sandholm
Web Producer


“Right now it feels like we’re in some kind of World War I-style no man’s land,” Cramer said Tuesday.“A hostile environment where stocks are too high to buy, but too low to sell.”

The “Mad Money” host said investors should use every tool at their disposal to determine where the market could go next. Although it feels like the averages have been annihilated, Cramer said the charts are painting a “pretty bleak picture” with the longer-term support being taken out.

Many technicians are calling for a continued decline. Ed Ponsi of Barchetta Capital Management, however, takes a much less negative view. Why? Watch the video to find out.

Wednesday, September 7th, 2011 Jim Cramer, Stock Trading No Comments

Jim Cramer: Why IRAs Are Better Than 401(k)s

Don’t max out your 401(k) contributions, Cramer said. That money could be better spent.

You definitely don’t want to turn down the free money that comes with a company 401(k) match. Cramer’s rule of thumb is to only contribute as much as your company is willing to put in. If your company will match 3 percent, then only put 3 percent of your pay into a 401(k).

But too often these retirement options have high management fees and your investment choices are limited. That’s why Cramer recommends that any extra money you have beyond a company’s match go into an IRA. They get the same great tax benefits of a 401(k), they cost less and grant you more freedom of movement.

Cramer was specifically talking about regular IRAs, not Roth IRAs. For regular IRAs, your contributions are tax-deductible, and you pay no taxes on gains mad until you start withdrawing the money during retirement—and then the tax rate is the same as regular income.

You can contribute $5,000 to an IRA in 2008—$6,000 if you’re over 50. Cramer recommended you do just that. If you still have money left over after that—and only then—feel free to put even more money into a 401(k), he said.

The combination of these two investment vehicles should make for a much better retirement.

(Written by Tom Brennan; Edited by Drew Sandholm)

Tuesday, September 6th, 2011 Evergreen, Jim Cramer, Stock Trading No Comments

The Difference Between Investing & Trading

[Note from Timorous: As is often the case, Cramer is close, but not quite right with his distinction between trading and investing - where he gets it wrong is in saying the difference is primarily one of time frame.  In fact, the difference runs much deeper: traders look for a price move in their favor, regardless of time frame, while investors are looking for value from ownership itself.]
Published: Tuesday, 30 Aug 2011 | 7:13 PM ET
“Not all Wall Street gibberish is deceptively complicated,” Cramer said Tuesday. “Some of it is deceptively simple.”  Case in point: The idea of investing versus trading.

A lot of people use the terms interchangeably, but they shouldn’t. At least on Mad Money, they carry very different meanings. An investment is based on a long-term thesis, while a trade is any stock purchase made to profit from a short-term catalyst. Mixing up the two can cause some serious damage to your portfolio.

Only buy a stock as a trade when you know there’s some future event that could drive its stock price higher. Maybe, if we’re talking about a pharmaceutical company or a biotech, it’s the release of positive clinical trial data. Whatever the catalyst, though, the strategy is to game that news and, hopefully, take profits after. But even if the plan doesn’t pan out and you lose money, Cramer said, you must take profits once the catalyst has past. The biggest mistake you can make is to turn a trade into an investment.

On the investing side, you might see some short-term declines, but that’s OK. The goal here is to bank profits over the longer term. So those dips are just a chance to buy more of the stock in question, provided you still believe in the thesis that brought you to it in the first place. And if the stock should rise in price, don’t take your money and run. Should your thesis hold true, there will be still more good news ahead for the company.

Cramer made this last mistake himself with Apple[AAPL  377.29    -3.74  (-0.98%)   ]back when it was trading at $26. The share price jumped $5 and he took profits. Yup, at $31 he cashed out.


(Written by Tom Brennan; Edited by Drew Sandholm)

When this story was published, Cramer’s charitable trust owned Apple.




Friday, September 2nd, 2011 Evergreen, Jim Cramer, Stock Trading No Comments