Jim Cramer's Mad Money In-Depth, 3/5/08: Killinger Makes a Killing

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Includes: BPT, ED, HGT, PBT, SJT, STX, WU
by: Miriam Metzinger

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program,Wednesday March 5. Click on a stock ticker for more analysis.

Consolidated Edison (NYSE:ED), San Juan Basin Royalty (NYSE:SJT), Hugoton Royalty Trust (NYSE:HGT), Permain Basin (NYSE:PBT), BP Prudhoe Bay (NYSE:BPT)

Cash is no longer king, since the Fed will continue to cut rates, said Cramer, who would opt instead for high-yielding stocks. Dividends are better than cash, because taxes on dividends are lower than on interest income, they have a higher yield than that for cash-based investments, and there is a more significant upside potential in dividends. Cramer has already talked up ED for its generous 5.7% yield, and added utilities are safe recession-proof plays. Cramer would look at U.S. energy trusts which own oil and gas wells but let other companies run them, and are tax exempt as long as they pay out a good dividend. If these stocks are held in an IRA or in a 401 (k), they are tax exempt until funds are withdrawn upon retirement. Cramer likes energy trusts SJT, HGT, PBT and BPT; the latter two provide double digit yields of 12.2% and 13.9% respectively. Although Cramer believes oil will reach $125, even with black gold at the $70 or $80 level, the companies historically yielded a solid 8%-9%.

Washington Mutual (NYSE:WU) CEO Kerry Killinger

WaMu CEO Kerry Killinger’s 548% bonus proves that no sin goes unrewarded, given that he is “one of the worst CEO’s in the world” who brought WaMu “to the brink of insolvency,” said Cramer. In spite of presiding over huge credit losses, Killinger is getting this perk because of operating profit, non-interest expense, depositor fees and customer loyalty performance. Cramer says shareholders should protest this $4.1 million gift, and he placed the entire Board of WaMu on his Wall of Shame.

Mad Mail: Seagate (NASDAQ:STX)

Cramer told a viewer to get out of STX if it rises at least $1 after IBM’s analyst meeting on Thursday, since now is not the time of year to invest in Tech.

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