In uncertain times, you need to own certainty, Cramer told viewers, as he followed up on Veolia Environ (VE), a company that stumped him during an earlier show. Cramer said that while Veolia, an environmental water and waste management company, currently pays a hefty 12.5% dividend yield, the company's dividend is a huge red flag and one that should be avoided.
Veolia has lost 22% of its value since the company reported a strategy shift in its strategy on Aug. 4. The company is currently a pastiche of over 2000 different companies all under one roof. After struggling to manage, let alone integrate, these entities that reside in 77 countries, Veolia decided to focus on just 44 countries and sell the other assets.But Cramer noted that Veolia relies heavily on Europe, and suffers from many of the same problems as the continent does, including little clarity, being locked into unprofitable contracts and unable to control its costs. Cramer said Veolia will likely see a dramatic cut in its dividend, which is extremely risky for its stock, which trades at a premium to the market. He said Veolia would be a decent environmental play if the company had its act together, but this market will not reward uncertainty.