To find the next generation of growth stocks, Cramer on Monday reflected on the past. The bull market in the technology sector during the 1990s was not so much about technology as it was about innovation, the “Mad Money” host noted. So what companies are innovating today?
“DuPont's perhaps the single most innovative company I know of,” Cramer said of the 201-year-old company , praising its management team and juicy dividend yield of 3.2 percent. “The corporate culture is all about using science to tackle some of the toughest challenges out there and transform society.”
Although the world’s second largest chemical conglomerate, Cramer said DuPont is not just a cyclical chemical play. He thinks the company is so innovative that it has a secular growth story with potential to generate multi-year gains. Its stock has climbed 200 percent over the last three years, but so long as DuPont continues to innovate, Cramer thinks it can continue to go higher.
Today, DuPont is focused on solving three problems in particular: feeding the world, reducing dependence on fossil fuels and protecting both people and the environment.
“DuPont's like a big stew of innovation across multiple different end markets, so it's no wonder that the company can grow earnings at a 10 percent clip, long-term,” Cramer said. “What does surprise me is the fact that the stock trades at just 11 times next year's earnings. If you look at DuPont as a technology company, it's easy to understand why this one deserves a much higher multiple.”
Bottom line: DuPont is one of the most innovative companies Cramer is aware of and for that reason, he thinks its stock will continue to climb.
When this story was published, Cramer's charitable trust owned DuPont.
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