Cramer’s Dividend Play – Procter & Gamble
“Dividends might be the best indicator of a company’s strength in this market,” Cramer said on Tuesday’s “Mad Money” TV show. He told viewers the only stocks investors should trust are those which have raised their dividends, or which likely to do so in the future. Cramer recommended Procter & Gamble (PG) as his next pick in his series of dividend raisers. He said PG is down almost 20 points from its highs, but the company has raised its dividend for 52 consecutive years. He thinks that is little doubt it won’t raise its dividend for 2009. Cramer said PG isn’t a stock he usually likes this late in the economic cycle, but he prefers the stock for one big reason, and that is the weakening dollar. Now that the dollar is falling, PG should do well because 61% of its sales come from outside the U.S. Cramer also likes PG for a play on lower commodity costs. The company has passed 75% of its costs onto consumers and won’t rescind those increases just because oil is down. The stock trades at 11 times earnings, while the rest of its competitors trade at around 14. Cramer thinks the stock could run up 23% from current levels. Get the scoop on tomorrow’s hottest trade ideas – TODAY! BeaconEquity.com PREMIER PICKS have an amazing track record. Join this select group and ride the profit wave!
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