In an "Executive Decision" segment, Cramer sat down with Maggie Wilderotter, chairman and CEO of Frontier Communications (FTR), a stock which Cramer recently placed in the "Sell Block" after the company slashed its dividend by 25% when it acquired 4.8 million access lines from Verizon (VZ).
Wilderotter said Frontier has been a high-paying dividend company since 2004, and chose to reduce its dividend to investing in new markets, grow revenue and created even more cash flow going forward. She noted that even after the reduction, Frontier is still one of the highest-yielding companies in the S&P 500.
Wilderotter also noted that the deal with Verizon was initiated by her, and de-leveraged the company from 3.9 times earnings to just 2.6 times earnings. She said Frontier's billing systems are also scalable, allowing the company to easily absorb the new lines. In addition, Wilderotter said she's "very comfortable" with the $500 million in synergies predicted from the deal.When asked about the 11.2% loss of lines reported from the deal, Wilderotter said she knows how to turn that tide around, and Frontier had lower- than-average line losses before the deal. Finally, when asked whether the dividend is safe, Wilderotter said simply, "Yes." Cramer said he felt better about Frontier after having the conversation, and investors should, too.
Lightning RoundCramer was bullish on Sears Holdings (SHLD), Home Depot (HD), BP Prudhoe Bay Royalty Trust (BPT), Permian Basin Royalty Trust (PBT), Union Pacific (UNP), Intuit (INTU), DuPont (DD), CBOE Holdings (CBOE), First Horizon National (FHN), PNC Financial Services (PNC) and US Bancorp (USB). He was bearish on Petroleo Brasileiro (PBR), Penn West Energy Trust (PWE), H&R Block (HRB) and Green Mountain Coffee Roasters (GMCR). --Written by Scott Rutt in Washington, D.C. To contact the writer of this article, click here: Scott Rutt. To follow the writer on Twitter, go to http://twitter.com/scottrutt. To submit a news tip, send an email to: firstname.lastname@example.org. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here. For more of Cramer's insights during the Lightning Round, click here.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV