Cramer's 'Mad Money Recap': Nordic American's Juicy Dividend

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"There is a stock out there that can give you both a morbidly obese, double-digit dividend yield and up to 25% upside potential," Jim Cramer told viewers of his "Mad Money" TV show Thursday.

That stock is Nordic American Tanker (NAT Quote), Cramer's new favorite oil tanker company.

Cramer has been a fan of Frontline (FRO Quote), which is up 17% since his July 23, 2007 call and 36% if you include the company's dividend payment.

Cramer believes Nordic American is the next Frontline, and could make investors even more.

Nordic American recently reported earnings below consensus estimates, but Cramer said investors should not worry. He said the company's raised its dividend to $1.18 a share after its earnings report on Monday -- a level nearly double that of what it paid out in the third and fourth quarters of last year. "This is the real indicator for this stock," he said.

According to published reports, Nordic American's day rate for its tankers is now $46,600 per day, up from just $27,000 per day last year. Cramer predicts this rate will go even higher based on simple supply and demand.

Nordic American operates 12 Suezmax tanker ships, with two more scheduled to join its fleet later this year. However, with OPEC increasing oil production, the demand for tanker ships is on the rise.

Cramer noted that some of the larger tanker ships are being converted from oil to dry bulk, hastening the demand. He also mentioned that 46 single-hulled tankers are scheduled to be taken offline by 2010.

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