Cramer's 'Mad Money' Recap: Forget Earnings, Dividends Matter

Stretching the Dollar

In tough economic times, Cramer said the smart money is on the "trade-down" plays, companies people turn to in order to save money. But he noted in the battle of the dollar-store chains, only one can emerge victorious.

Cramer said by all accounts, Dollar Tree (DLTR), with its better metrics, should be the obvious choice, but there's a problem: The company is just too loved by Wall Street. That's why he's recommending Family Dollar (FDO) as the dollar store chain to own.

Cramer believes Family Dollar, while not the better company, is the better value and the better stock. He said Family Dollar outperformed rival Dollar Tree handsomely in the last recession between 2000 and 2002. And since the company is not trumpeted on Wall Street, Cramer said there's a lot of room for analyst upgrades as the economy worsens.

Cramer said Family Dollar is improving its product mix to include more items that people need, like food, as opposed to other items they merely want. Family Dollar also now accepts food stamps and is adding credit card payments to some locations. A similar move at Dollar Tree saw an average ticket increase from $6 to $16.

Cramer also noted that Family Dollar is acting responsibly by suspending its stock repurchase program to preserve cash and reducing its inventory. He said the company last reported its earnings on Oct. 3, beating estimates by 4 cents a share.

Am I Diversified?

Cramer played "Am I Diversified" with callers to see if their portfolios can withstand the market's wrath. The first caller's portfolio included Citigroup (C), Flotek (FTK), Dendreon (DNDN), Chesapeake Energy and Yamana Gold (AUY).

Cramer said Flotek and Chesapeake are both in the oil patch, and one of them needs to be sold.

The second caller's top holdings included Exxon Mobil (XOM), General Electric (GE), Dupont (DD), Altria (MO) and Clean Energy (CLNE).

Cramer said he loved this portfolio.

Lightning Round

Cramer was bullish on Continental Resources (CLR), Lockheed Martin (LMT), Duke Energy (DUK), Kinder Morgan (KMP) and Enterprise Products Partners .

He was bearish on Computer Sciences , Annaly Mortgage (NLY), Northrop Grumman , Allegheny Energy (AYE), 3M (MMM), NuStar Energy (NS) and Wyeth (WYE).

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

Read more of Cramer's Mad Money Lightning Round insights.

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