A Dividend Boost Isn't Always the Answer

We've got a tale of two dividend boosts: Verizon (VZ - commentary - Cramer's Take) and Masco (MAS - commentary - Cramer's Take). One was right to do -- Verizon, which had one of the best quarters I have seen this reporting season. The other, Masco, seemed almost reckless, kind of like the Washington Mutual and New York Times (NYT - commentary - Cramer's Take) dividend boosts, which were really untimely.

You have to go over that Verizon quarter, you just have to. Texting on fire. Wireline not a disaster. Most important, FiOS was really strong, and I would be careful, analysts -- the surge in Comcast (CMCSA - commentary - Cramer's Take) orders may not occur if Verizon's got game.

Masco, on the other hand, really didn't seem to see this slowdown coming. And while I like dividend boosts, sometimes the by-rote dividend boost -- what this one felt like -- can only be considered dangerous, especially because a dividend cut would have been prudent.

I have to tell you that while I think the world of Masco, and I believe that housing will bottom next year, I would have preferred if MAS had hoarded money.

The market clearly agrees.

At the time of publication, Cramer had no positions in the stocks mentioned.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.