Mad Money with Jim Cramer

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Cramer’s 9 New Dividend Plays

Bonds and certificates of deposit have long been considered safer investments than stocks. But in an era of incredibly low interest rates, Cramer said, buying the former two could be a mistake.

A CD right now might offer a 1.5% return, while 10-year Treasurys pay you 3.75%. A company with a high-yielding dividend, however, can generate more than 7% (see: Kinder Morgan Energy Partners, among others). But even stocks with sub-4% yields these days may net more than those 10-years because dividends enjoy a better tax rate. And they offer the potential for upside, which is something those so-called safe investments don’t.

Cramer pulled together an updated list of his favorite high-yielding picks to help investors take advantage of the trend. (Click here for his first) These are companies that not only return generous sums to shareholders, but also have a history of raising those payouts. The end result? Investors collect a steady stream of income now and all but bank on even more in the future, whether through a rising stock price or an increasing dividend.

Read on for Cramer’s nine newest dividend plays. Just remember: The numbers listed here were correct as of publish time, but they may have changed a bit since. So do your homework! And make sure these stocks still work for your portfolio before you decide to buy.

Cramer’s charitable trust owns Altria and Emerson Electric.

Posted Jan 5 2010