Getting Defensive with Jim Cramer

Cramer Says Microchip Tech Pays to Wait

Investors need to find stocks that can play good defense, says Mad Money's Jim Cramer. That means a high yield, and attractive risk reward, like Microchip Technology, which pays you to wait, better than any other semiconductor company.

In this tough environment, Cramer on Monday recommended investors get defensive. The "Mad Money" host said to look for stocks that have a high dividend yield, as well as an attractive risk-reward.

Take Microchip Technology , for example. It is a semiconductor manufacturer, which primarily makes microcontrollers or chips that go into simple electronic devices. Its 4.5 percent dividend yield is the highest in all the semiconductor space.

(RELATED: Cramer's Top Dividend Stocks 2011)

Cramer recommends investors do their homework on this stock and start buying share when the stock drops to a 5 percent yield. And he thinks the stock does have further to fall. It's barely a point off its 52-week low. Expectations are so low, Cramer thinks Microchip should be able to beat them.

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