Big Dividend Companies
"In this market, you need companies that will pay you to wait," Cramer told viewers, as he began a week-long series highlighting companies with big dividends as well as plans for continued growth. He started with paper giant International Paper (IP), which currently yields 3.85%.
Cramer said International Paper is being run better than ever. With new pricing controls and supply and demand in balance, the company has more control over inventory, and thereby pricing, than ever before, he said. According to Cramer, even in this miserable downturn, International Paper has been able to shine.
The company also has a great track record of acquisitions, as noted by the company's proposed $3.2 billion bid for Temple-Inland (TIN), a deal that is expected to close in early 2012. Cramer said that the company expects $300 million in synergies between the combined companies, but those estimates are likely far too low.After many years of being more "domestic paper," Cramer said that International Paper now has a great international business, with growing assets in Russia poised to service all of China's growing paper needs. Cramer said that International Paper has a lot of room still to go in its international efforts. International Paper last reported a 12-cent-a-share earnings beat, a feat Cramer said will likely be repeated when the company reports in October. Shares of the company trade at just 8.4 times earnings and Cramer said now is the perfect time to begin building a position, buying on any weakness.
Tech Value PlayKicking off a new series entitled the "Time For Tech," featuring tech companies poised for breakouts to the upside after a horrible summer season, Cramer highlighted Juniper Networks (JNPR), another Action Alerts PLUS holding. Cramer explained that Juniper is now off 55% from its March highs after posting an utterly horrible second quarter earlier in the year. He said the stock, now flirting with its 52-week lows, will be hard pressed to head much lower and it's almost impossible for the company to really disappoint amongst drastically lowered estimates. Cramer liked the fact that just about everyone has lost faith in this network equipment provider, especially given that the back half of the year is usually the best time for corporate and government IT spending. He said Juniper still has a small market share, but a strong line of new products ahead of it, so it should be easy for the company to once again begin taking market share. But mainly, Cramer said Juniper is a value play, with shares trading at rock bottom prices. Juniper currently has $3.2 billion in cash on its books, the equivalent of $6 a share. That leaves shares trading at just 10 times earnings, despite the company's 16.9% growth rate and 20 times historical average. Cramer said Juniper is likely to also report a weak third quarter, but that lackluster performance is already baked into its share price. He said that not much needs to go right for Juniper and even if the company reports inline numbers, the stock could rebound. Cramer said he sees three points of downside versus 10 points of upside.
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