(Click for video linked to a searchable transcript of this Mad Money segment)
There are always buys. Even when lawmakers play games with the full faith and credit of the United States government, there's still opportunity. You just have to know where to look.
Ironically, when the market environment becomes dire, we often see a flight to safety, reminded the Mad Money host. However, this time around, the catalyst could trigger significant selling in the bond market; that is, if the US government stops servicing its debt Treasurys become less desirable, not more.
Therefore, Cramer thinks it's prudent to rethink what will be considered a flight to safety in the event of a default. And the most likely substitute, he says, should be dividend paying stocks.
Now make no mistake, "I fully expect that all stocks will get clocked as we get closer to the default deadline, or worse," Cramer said. "I'm only talking about bounce back candidates here."
That is, Cramer believes dividend paying stocks will attract new buyers after the smoke clears as relative safety plays. Of course not all dividend yielding stocks are created equal. In the event of a default, following are stocks Cramer likes best.
1. Dominion Resources: "First thing I would do is buy the stocks of utilities where I don't think there's much earnings risk. That means Dominion Resources," Cramer said. Cramer sees several catalysts. "First, it's going to spin off a master limited partnership, which is terrific and will bring in a lot of cash. Second, Dominion's strong core utility business allows for the continued increase in dividends."
2. ConEdison: Not only is ConEdison a utility but Cramer sees it as a stock that's somewhat insulated from the DC debacle simply because it services the New York metro area. "The NYC economy is more international than many realize," Cramer said.
3. Southern Company. Cramer likes the Southern Company due to what he calls, "an amazingly long-term history of paying the dividend through the toughest times imaginable. I've interviewed Southern several times and I truly think they get the sanctity of the dividend better than just about any other utility."
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4. Pfizer. "Pfizer keeps churning out earnings and remains committed to raising its dividend. The company is also so pro-active that it actually spun off its Zoetis animal health division to unlock value. I like that," Cramer said.
5. Campbell Soup. "It is a serial dividend raiser," Cramer said. "Nothing more consistent than soups and snacks."
6. Altria. "I know there's tremendous resistance to buying tobacco stocks," Cramer admitted, "but this is a business that keeps taking share and keeps boosting its dividend every August. Talk about a constant!"
7. Verizon. In the event the telco stocks take it on the chin, Cramer is a buyer of Verizon. "They just bought the remainder of Verizon Wireless from Vodafone," Cramer reminded. "I expect growth to l be much higher now that it owns all of that wireless business. And I don't doubt for a minute that Verizon will maintain its policy of boosting the dividend. If you can get this one at a 5% yield, not far from here, I think it's a steal."
8. Ventas: As an owner of senior housing and health care facilities, Cramer likes this company as a play on aging baby boomers. And with a 4.3% yield, if not for a government induced sell-off, Cramer would be a buyer right here.
Call Cramer: 1-800-743-CNBC
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