Cramer's Diversified Dividend Portfolio
Cramer’s still bullish on dividends, especially in these turbulent times. Because with a market as volatile as this one, investors need to find returns any way they can.
That’s why he pulled together a diversified portfolio of some of the highest-yielding names out there. The average payout? 7.7%. Perfect for the type of defense that’s needed right now.
Nordic American Tanker : NAT’s a play on expectations that oil will be more expensive a year from now. In preparation for such a move in price, investors are buying large stores of oil now and using tankers to hold it. This trend, as well as a strike in France, is keeping the available-tanker count low, and that should mean steady business for NAT. So the fat 9.5% yield the company offers looks to be stable.
Verizon : Cramer’s long touted the potential of FiOS, Verizon’s television and high-speed Internet offering. The company has signed up 1.6 million and 2.2 million customers, respectively, for these services, and the growth that comes as a result should handily make up for any declining landline business. Plus, Verizon’s the sole distributor of RIMM’s new Blackberry Storm, and now owns half of Verizon Wireless, the largest wireless player in the U.S., thanks to the Alltel acquisition (Vodafone owns the rest). Investors in VZ get all of this and a 5.3% yield, too.
Great Plains Energy : Utility’s are known for their consistency, and their dividends. GXP, which pays out 9.2%, is no different. The company serves 800,000 customers in Western Missouri and Eastern Kansas and has the capability to raise rates, Cramer said, in the near future. GXP also just finished a big capital-expenditure program, building a cleaner coal plant, a wind project and retrofitting its existing plants.
Kinder Morgan Energy Partners : Cramer’s been talking about KMP for a while now. It’s a master limited partnership, which means KMP is required to return most of its profits to shareholders in the form of a dividend. Right now the yield’s at 8.9%. The thing to keep in mind with this company is that the price of oil has no effect on KMP’s business. This is an oil and gas transporter, not a driller. So if oil drops $100 a barrel, as it has, that dividend is still safe.
Bristol-Myers Squibb : With a strong balance sheet and great near-term earnings, BMY is a buy, Cramer said. Plavix, a $4 billion cardiovascular drug, may lose patent protection come 2010, but Bristol-Meyers has plenty of drugs in its pipeline to make up the difference. The company’s also got treatments for psychosis, cancer, HIV/AIDS, and maintains its relationships with Pfizer and AstraZeneca . There’s even talk that BMY is a takeover target. Enjoy the 5.6% dividend yield until that happens.
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