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A Steel Stock that Pays You to Wait

Cramer has said it over and over again—in this market, you need to find stocks that pay you to wait for things to get better. Nucor, the largest maker and recycler of steel in America, is one of those stocks, he said Tuesday.

“Nucor is a best of breed steel maker with a juicy dividend,” he said. “This is a classic cyclical stock that's paying you to wait for things to get better … and I think it belongs on your shopping list and in your portfolio for the next Greek-related downturn.”

(RELATED: Cramer's Top Dividend Stocks 2011)

Nucor , which has a 4.2 percent yield at these levels, makes sense now that steel prices appear to have bottomed. The stock has also come back in line with the broader market after underperforming last year.

What’s more, Nucor is also not the same company it was in 2008. It has made improvements in its business and its balance sheet is now in great shape.

However, there are still some things to worry about, Cramer said. The overcapacity in the global steel industry has forced many manufactures to export steel below their cost of production, although it’s less of a problem for Nucor because the company is a low cost producer. Plus the Chinese are producing way too much steel, which is winding up in foreign markets.

But Cramer said the biggest challenge for Nucor remains the weak demand for housing and non-residential constructions in the U.S. Nucor, however, is still turning a profit in steel used for construction.

So how should you play it?

Cramer would buy a fraction of the position you want now, and then wait for it to come down to buy some more. When the stock hits $32.22 it will have a 4.5 percent yield, and at $29 it will yield 5 percent.

“Here’s the worst case scenario: Nucor goes higher and your small position makes you money.”

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