Cramer's 'Mad Money' Recap: Ready for the Recession

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"This recession has only just begun," Jim Cramer warned viewers of his "Mad Money" TV show Wednesday.

He told them this is the worst market he's ever seen and advised them to sell into strength and stick only with the right stocks for this environment.

He told investors they should look for stocks with a sky-high dividend yield and management who can handle a recession.

One company that fits that bill is Eaton (ETN Quote), he said.

After sliding from a high of $99 a share, Eaton has slid to $39 a share and sports a 5.1% dividend yield. That slide is just too far, too fast, said Cramer. The company now trades at where it did in 2003, but it is a completely different animal.

Since 2003 Eaton has nearly doubled its revenues, improved its margins and raised its dividend 117%. The company has also prepared itself for a recession by diversifying out of autos, which accounted for 41% of the company's sales five years ago to 27% today. The company now focuses on electrical and fluid power systems, making components for a wide array of industries and applications.

Cramer reminded viewers of the power of reinvesting dividends by noting that reinvesting Eaton's dividends would double investors' money every 14 years, even without any stock appreciation.

He advised buying Eaton on a scale as it trends lower and selling portions if it trends higher.

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