5 High-Yielding Dividend Buy Calls And 4 Sells From Mad Money

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Includes: BBEPQ, ETP, EXC, KMP, PBI
by: Chris Lau

The S&P 500 index continued its relentless climb for 2012, closing at 1,369.63. For the week of February 27 - March 2, the index added around 13 more points, and is up 80 points year-to-date. When stocks get more expensive, investors turn to securities that pay steady dividends. For stocks paying more than 5% yield, Thestreet.com's Jim Cramer made 5 "buy" calls and 4 "sells."

Cramer's calls are summarized as follows:

NAME

Call

Date

AVG VOL

YIELD (%)

Frontier Communications Co.

Sell

2/27/2012

21,478,100

8.7

Exelon Corporation

Buy

3/1/2012

7,196,710

5.4

Pitney Bowes Inc.

Sell

2/28/2012

2,955,020

8.3

BGC Partners, Inc.

Buy

3/1/2012

951,951

9.7

Veolia Environn ADR

Sell

3/1/2012

944,952

12.1

Energy Transfer Partners, L.P.

Buy

3/2/2012

924,003

7.5

BreitBurn Energy Partners, L.P.

Sell

3/2/2012

689,003

9.5

Kinder Morgan Energy Partners

Buy

3/2/2012

680,151

5.2

Boardwalk Pipeline Partners LP

Buy

3/2/2012

528,148

7.8

Click to enlarge

(Data source: Yahoo Finance)

Cramer's most notable call on March 2nd was the "sell" for BreitBurn Energy (BBEP). He said that the company's natural gas exposure was worrisome, and preferred Kinder Morgan Energy Partners (NYSE:KMP) and Energy Transfer Partners (NYSE:ETP). This analysis deserves further attention. BreitBurn's yield is 9.5%, while Kinder Morgan and Energy Transfer Partners pay 5.2% and 7.5% respectively. BreitBurn saw short volume increase to 438,852 shares on February 15, up 41.8% from January 31. Cramer's concern for the company's exposure to natural gas is valid, but BreitBurn realized an average $6.02 per Mcf in the fourth quarter. In that time, the Henry Hub natural gas price averaged $3.33 per Mcf.

BreitBurn's upside for stronger oil prices is limited, due to a hedging program to limit price volatility. In its quarterly earnings report, the company said that it hedged 182,500 barrels of 2015 production at an average price of $98.50/barrel.

Pitney Bowes (NYSE:PBI), which yields 8.31%, is a "sell" according to Cramer. Pitney Bowes recently revised its dividend payout up 1.4%. The company declared a dividend of $0.38 up from $0.37. In the company's most recent earnings report, Pitney Bowes said that its customers for mail and document-services were delaying new purchases. The company was still able to forecast revenue growth of up to 2% from 2011. Pitney Bowes closed at $18.01, flat for 2012 and down 26.45% from its 52-week high.

Yielding 5.38%, Exelon Corporation (NYSE:EXC), was rated a "buy" by Cramer. The company's payout ratio is 69.9%, with a dividend most recently declared on October 25 2011. The largest nuclear plant operator in the U.S. is in the process of merging with Consolidated Energy (NYSE:CEG). This will make the company the second-largest electricity and natural gas distributor. Shares are down 12.88% from its 52-week high, but investors who are confident that the deal will be completed will be rewarded in the longer term.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.