Jim Cramer acknowledged the current rally in the US markets but was cautious, saying that while this market is bullish, it is also volatile. The greatest gains come from being cautious and focusing on high dividends.
Here are the stocks Cramer discussed during his show Monday night:
Markwest Energy Partners (MWE) is a strong buy for Cramer. He says that the stock has an amazing 6.2% dividend yield and that number could increase going forward. It has enough capital to take on several new projects. Cramer thinks distribution could increase by 10% or more. Further, the company is moderately underpriced right now, making it a good time to pick up stock in a company that offers high yields and is in the energy industry, specifically natural gas.
Beam (BEAM) is a standalone liquor business that was spun out of Fortune Brands. Its brands include Jim Beam and Maker’s Mark. Cramer says that the liquor business works in good times and bad, making it rather recession proof, and this one in particular has always been a strong business. He sees lots of growth opportunities ahead for BEAM. The main reason that Cramer is on board with BEAM is the fact that it is the one liquor company in the market that can be easily bought, by a company like Diageo (DEO) for instance.
Deere (DE) is the agricultural equipment maker that manufactures the iconic John Deere brand. DE rose +5.6% yesterday, but Cramer still thinks it is a strong buy. In spite of the increase, it is still down 16% YTD and has been selling much lower than its historic price to earnings multiple. If that wasn’t enough, there are two strong catalysts that could fuel growth in Deere. The first is the USDA crop report, which is released Wednesday. A strong report will likely mean strong growth for Deere and possibly a rally. Secondly, the population is increasing and everyone needs to eat, which means there needs to be more farms and/or existing farms need to be more efficient. Either way, DE fits the bill.
Amazon.com (AMZN) is an online storefront and media provider, selling products through the Amazon.com website and manufacturing some of its own brands, like the popular Kindle. AMZN was up 2.93% on the day, to finish the day at $231.32 a share. Cramer sees the stock as one that has a strong name as well as a lot momentum that has been continuous. He definitely recommends buying. Ken Fisher, Fisher Asset Management is also a fan. Fisher keeps 1.33% of his fund’s $38.6 billion portfolio invested in AMZN (check out Ken Fisher’s favorite picks)
Vector Group (VGR) is a cigarette company. It rose by 1.59% to close at $17.87 a share. Cramer likes VGR because it has yield. Carl Icahn agrees. His fund has over 14 million shares in VGR, or a value of over $250 million (see more of Carl Icahn’s top positions)
Philip Morris (PM), also a cigarette company, rose by 1.41% yesterday to finish at $66.05. Cramer prefers PM over VGR. Tom Russo of Gardner Russo & Gardner, keeps more than 10% of his fund’s portfolio in PM, to a value of over $542 million (read about Tom Russo’s top positions).
Inergy LP (NRGY): Cramer is not a fan of NRGY. The company is in the propane business. Cramer thinks it is simply too competitive and too many people are switching. It closed the day at $23.40 a share and has a market cap of $3.07 billion. It offers a 12.05% dividend yield.
Entertainment Properties Trust (EPR) rose over 6% on the day, finishing at $39.80 a share. Cramer took a pass on the company explaining that he just doesn’t know enough to make a positive call. It has a PE ratio of $32.45 and a $1.86 billion market cap/
Altria (MO) is a stock that Cramer really does like but is recommending not to buy it, at least right now. Cramer says that the stock is on a spike and, while he likes it, he prefers not to buy anything when it is on a spike. MO has a $57.23 billion market cap and a PE ratio of 16.79. It also offers a 5.94% dividend yield.
McCormick & Company (MKC) is a steady grower and Cramer thinks it is at a terrific level to buy. It rose 1.11% yesterday, to close at $47.20 a share. It has a market cap of $6.24 billion and a PE ratio of 16.89. It offers a 2.37% dividend yield and is a favorite pick of John Rogers, Ariel Investments, who keeps over $43 million of his fund invested in MKC (check out John Roger’s top positions)
Frontier Communications (FTR) is recommended by Cramer. He is giving the company the benefit of doubt when he says it will make a dividend. Frontier rose 2.72% yesterday to close at $6.04 a share. FTR has a market cap of $6.01 billion and a PE ratio of 37.78. It offers a 12.42% dividend.
Pitney Bowes (PBI) says the yield is fine and Cramer agrees. It also increased in share price by 2.66% yesterday, to close at $20.09. PBI offers a 7.37% dividend yield. It has a market cap of $4.06 billion and a PE ratio of 11.62.
Annaly Capital Management (NLY) is a stock that Cramer is bullish about. He likes its good yield especially but the 3.23% increase yesterday didn’t hurt either. The stock closed at $15.98. NLY offers a 15.02% dividend yield. It has a $15.49 billion market cap and a PE ratio of 5.58.
Disclosure: I am long PM.