Mad Money

In Stocks, Cheap Isn’t Always Better

Mad Mail

As a newcomer to the world of investing, Mad Money viewer Jason asked Cramer for help with this dilemma: Is it better to buy a few shares of an expensive stock, or more shares of a less expensive one?

Instead of spending roughly $60 a share on Kinder Morgan Energy Partners, the viewer asked if it wouldn't be better to buy more shares of El Paso at approximately $12 a share. But the amount of shares you buy does not matter so much as the quality of the company, Cramer said. In this case, he said "Kinder Morgan is the best in breed and El Paso is not." Kinder Morgan boasts a 6.3% dividend yield, where El Paso barely has one. And what's more, Cramer thinks KMP has better management.

"Don't sacrifice quality for quantity," he said. "You'll end up regretting it."

The next letter came from Malinda in Texas, who is interested in DuPont . She has liked this company since Cramer recommended it as an "accidental high yielder" in May, or a stock that has been driven down to where its dividend is producing a higher-than-expected yield. Because the stock has started to climb back up, she wondered if it's time to sell.

Cramer noted that the company reported a "remarkable" quarter, which showed good results on the top line, meaning sales and revenues. It also did well on the bottom line, or profits. He said its automotive and housing paints products, as well as the agriculture units, performed well and, he thinks the dividend could go up. He is still bullish on DD.

Call Cramer: 1-800-743-CNBC

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