Cramer's Mad Money - 6 Dubai-Proof Dividend Stocks (11/30/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday November 30.

Intel (NASDAQ:INTC), Kimberly-Clarke (NYSE:KMB), McDonald's (NYSE:MCD), Clorox (NYSE:CLX), Sanofi-Aventis (NYSE:SNY), Eaton (NYSE:ETN)

While Cramer doesn't think the Dubai debacle will have a permanent effect on the market, or even spark a correction in the near term, playing it safe may be a good idea. The shorts also seem poised to attack the market, and one way to stop them in their tracks is through dividend stocks. Since shorts have to pay the dividend attached to stocks they are shorting, they tend to stay away from stocks that have hearty yields. In addition, dividends tend to provide a necessary cushion and extra cash during slow times. Best of all, taxes on dividends are relatively low.

Cramer's top six dividend stocks are also safe, secure companies. Intel (INTC) has a 3.3% yield, Kimberly-Clarke (KMB)'s dividend is at 3.6%, McDonald's (MCD) has great international exposure and a 3.5% yield, Sanofi-Aventis' (SNY) dividend is 3.8%. While Eaton (ETN) has lowered its yield from 4.1% to 3.1%, Cramer still considers Eaton a buy because it is a strong name in the industrial sector.

Cramer's Holiday Wish List: Jarden (NYSE:JAH), Whirlpool (NYSE:WHR), Newell Rubbermaid (NYSE:NWL), Amazon (NASDAQ:AMZN), Wal-Mart (NYSE:WMT)

The darlings on Black Friday were Home Goods, particularly appliances. Cramer would buy premium, bargain and mainstream names in this sector. Consumers who buy Oster blenders or Mr. Coffee percolators want value for low prices, and Jarden (JAH), which produces these items makes "exactly the kind of appliances we know consumers are buying," said Cramer. Whirlpool (WHR) is the premium name for appliances, which are not only top quality but energy efficient. Whirlpool has significant exposure to Brazil's booming economy and while Cramer has placed a $90 price target for Whirlpool, he thinks the stock could well hit $100.

Newell Rubbermaid (NWL) is a middle of the road appliance maker which is cutting its costs and outsourcing production. The company is expanding into both high-end and bargain products with quality cookware and discount kids' items. Finally, Amazon (AMZN) is not just books and music. Cramer thinks Amazon is fast becoming the online Wal-Mart, and offers appliances and electronics at deep discounts.

High and Low: TJX (NYSE:TJX), Williams Sonoma (NYSE:WSM)

Continuing his focus on products for the home, Cramer discussed TJX (TJX), best known for its apparel stores. While not a pure play on home improvement, the company's Home Goods stores are having a "phenomenal year" according to CFO Jeff Naylor. Consumer traffic is increasing dramatically, same-store sales were 10% up on October and the company beat estimates and raised guidance in its earnings report. Currently TJX's stock is "roaring" higher, according to Cramer.

Williams Sonoma (WSM) is a play on the return of discretionary spending. While customers can get similar items cheaper other places, Williams Sonoma is seeing a dramatic increase in sales and its inventory is decreasing by 21%. Cramer thinks its 19.2 multiple is cheap given its 25% growth rate for 2011. Williams Sonoma is going to be strong "for many quarters to come," said Cramer.

Eaton (ETN) CEO Sandy Cutler

Cramer recommended Eaton (ETN) as a dividend play in July, although the company cut its yield from 4.1% to 3.1%. Would Cramer still recommend the stock now? Eaton's stock price is up 31% since he discussed it this summer, and Sandy Cutler expects more upside thanks to its consistent growth, cost-cutting measures and the fact that 55% of its revenues come from overseas. Eaton is about to receive a total of $500 million in stimulus money over the next two years. With everything else looking up for the company, Cramer is willing to forgive the dividend reduction and still stands behind Eaton.


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