5 High-Yielding Stocks to Own
Cramer on Wednesday offered an alternative to the stumbling bond market: having a diversified portfolio of high-quality dividend stocks with juicy yields of 4 percent or more.
The "Mad Money" host revealed his favorite name in five sectors: telecommunications, energy, utilities, real estate investment trusts and consumer or financial names. Here is what he came up with:
In the telecommunications space, Cramer likes Verizon , which boasts a 5.9 percent dividend yield. The company recently boosted its dividend by 2.6 percent for the fourth consecutive year and Cramer expects more of the same. He said Verizon has a great wireless network and will profit from Apple's iPhone, which it will begin to sell next year.
Cramer's fave energy play is Kinder Morgan Energy Partners . One of the largest, most diversified players in the oil and gas pipeline space, Kinder is building a pipeline in the Marcellus shale that should bring additional profits. KMP currently pays a 6.3 percent dividend yield, but the company recently said it plans to increase the payout by 4.5 percent next year.
When it comes to utilities, Cramer prefers UIL Holdings , which sports a 5.8 percent dividend yield. The New England-based utility is in the process of purchasing three gas utilities from Iberdrola, a troubled Spanish business that Cramer said was desperate to raise cash. When the deal goes through, UIL will double in size and increase its earnings power, too. Cramer said it's also expected to get regulatory approval to raise rates sometime next year.
Real estate investment trusts are known for paying "plump" dividends, Cramer said. His favorite is EastGroup Properties , which yields at 5.1 percent and has paid 123 consecutive quarterly dividends. EastGroup's stock soared following the last financial crisis of 1991 and Cramer thinks it will soon soar again.
Finally, Cramer picks Altria Group over all other financial and consumer stocks. It yields 6.2 percent and has already raised the dividend by 11.8 percent since the beginning of the year. The tobacco name has "tremendous" pricing power, Cramer said, allowing it to raise prices on its major brands by 2.2 percent. At the same time, the cigarette maker is cutting costs.
When this post was published, Cramer's charitable trust owned Apple.
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