So many historically high yields out there. So many. You hit them up and you are so tempted: Dow Chemical (NYSE: DOW) (Cramer's Take) at 8.8%, General Electric (NYSE: GE) (Cramer's Take) and Du Pont (NYSE: DD) (Cramer's Take) at 6.85%. Even Intel (NASDAQ: INTC) (Cramer's Take) at 4% and change.
You think to yourself: How can you not plunge in?
And you may be right.
The most exciting page in the paper, the dividend declaration page, causes us to take a hard look at who can declare and who can't. GE and Dow, for example, have drawn lines in the sand of payment for 2009, which is worrisome because unless 2009's a big second half, I don't know how they necessarily get to 2010.
Intel? Huge coverage, but no growth. Du Pont, all the bad businesses out there connected to housing and to agriculture, which has become a big bear.
After the stunning departure of Freeport-McMoRan's (NYSE: FCX) (Cramer's Take) dividend, we simply can't take anything for granted.
My take would be, though, which companies have gone into survival mode to get there? Which companies will even make you money if they cut the dividend?
In that case, I think that you might be looking at all of them making you money, because they are pricing in that they can't pay. So if they can pay, the stock goes higher, and if they can't, I question whether the situation won't be like Freeport, which hasn't gone down much more than it was despite a decision many people would regard as being shocking.
All of these could snap back for the Santa Claus/Obama rally that's building as Santa's stocking low oil and gas and President-elect Barack Obama's saying everything right as opposed to the current crop of politicians who simply can't say anything that isn't wrong.
I am looking this week at all of the high yielders. I am scouring them using the excellent work of Dave Peltier, manager of the Dividend Stock Adviser portfolio. The bargains are indeed out there.
You just need to know how much of the dividend being cut is already priced into the stock, or is near it. Those are the bargains.
Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Freeport-McMoRan and General Electric.
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Reader Comments (Page 1 of 1)
12-08-2008 @ 11:01AM
beachpaul said...
Well, name ten of them.
12-08-2008 @ 5:27PM
nick said...
Crammer maybe you should get on theband wagon and take a pay cut along with the rest of you slime balls on CNBC. Maybe you could get the CEO of GE to work for nothing????
12-08-2008 @ 9:43PM
fmontgomery said...
Why is Altria(MO) yielding nearly 8%? And supposedly growing at 6-8% with dividend increasing annualy. What are we missing?