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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday June 27.

Reynolds American (NYSE:RAI), Lorillard (NYSE:LO), Altria (NYSE:MO), Philip Morris International (NYSE:PM)

With new packages on cigarettes that will show in vivid detail the health consequences of smoking, the decline of smokers in America and threats of litigation, Cramer is less bullish on tobacco stocks than he was in the past. While many of these stocks have high dividends, the risks of owning them don't seem worth it. Cramer would recommend only one tobacco stock: Philip Morris International (PM), because it is not levered to the U.S., where the number of smokers is only 21% of the population, compared to 37% in developed countries and 50% in emerging market countries. Cramer discussed a few tobacco stocks:

Philip Morris International yields less than other tobacco stocks, only 3.9%, but has a growing business in emerging market countries, especially China, where there are 300 million smokers.

Altria (MO) yields 5.6% and is diversified into smokeless tobacco.

Reynolds American (RAI) has a 5.7% dividend and has seen a 54% run. The company has a smokeless tobacco business, but it comprises only 10% of its revenues. Cramer is bearish on RAI.

Lorillard (LO) is 100% levered to the declining American tobacco market, is 100% levered to cigarettes and most if its revenues are from only one brand. Cramer would not buy LO.

CEO Interview: Tom Fanning, Southern Company (NYSE:SO)

Cramer discussed Southern Company (SO), a utility with solid growth, based in the Southeast. The company yields 4.7% and has raised its dividend every year for the past decade. SO is becoming increasingly diversified; 53% of its energy is produced from coal compared to the previous level of 70%. The company uses nuclear, wind, solar, natural gas and biomass fuel in addition to coal. It has the largest biomass plant in the U.S. and the second largest solar facility. The company is outperforming the S&P 500 and is able to pay its dividend consistently because of the rapid economic recovery in Southeastern states. When asked which fuel is the best, Tom Fanning said there is no panacea fuel, but all are needed to complete the energy picture. Natural gas cannot be the single energy solution because of difficulties with transportation and price volatility. While biomass, solar and wind are important, renewable energy will never play the role that traditional fuels do.

"This is a stock you should have in your portfolio," said Cramer.

2 Restaurant Stocks to Own: Darden (NYSE:DRI), Chipotle Mexican Grill (NYSE:CMG)

There are few clearer correlations than the relationship between the price of gas and restaurant stocks. With oil hitting $90, the decline in oil will soon be felt at the pump. Gas has declined only 11% so far compared to a 21% fall in the price of oil. With gas and commodities going down, Cramer would buy these two restaurant stocks:

Darden Restaurants (DRI) owns the Olive Garden, Red Lobster, Capital Grill and Longhorn Steakhouse. Since the company owns all of the restaurants and none are franchises, it will benefit directly from falling gas prices. The company is revamping Red Lobster and has seen substantial success with redecorating its Olive Garden restaurants. Darden reports on Thursday, and the stock will likely trade on its outlook, not on its earnings. Darden's quarter was weak, but Cramer insists it is just a hiccup, especially with declining oil and commodity prices. The stock trades at a multiple of 12, compared to a historical high of 13 and an industry average of 17.

Chipotle Mexican Grill (CMG) is able to pass on its price increases, and with commodities coming down, these increases will be pure profit. Cramer thinks this turbo-charged growth stock has plenty of room to run.

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Source: Cramer's Mad Money - Tobacco Stocks Are Hazardous to Your Wealth (6/27/11)