Cramer said the moral of these cautionary tales is to never trust management unless the company has earnings to back up its claims. In both cases, company management gave no indication the dividend was in trouble until it was.
In some rare cases, management does provide a heads-up, as
did for most of last year. But for the vast majority of cases, the shareholders are the last ones to know unless they're doing their homework.
In the Lightning Round, Cramer was bullish on
American Water Works
US Airways Group
Cramer was bearish on
Level 3 Communications
Executive Decision: Nick Schorsch
In the "Executive Decision" segment, Cramer sat down with Nick Schorsch, chairman and CEO of
American Realty Capital Partners
(ARCP - Get Report)
, a REIT that's raised its dividend in the past five consecutive quarters.
Schorsch has a positive story to tell -- his properties are not only 100% leased at the moment but his company has 0% of those tenants renewing their leases over the next 12 months and only 1% of their leases renewing in the next three years. Additionally, he noted that 79% of all American Capital's tenants are investment grade.
Being a REIT is all about size, Schorsch continued, which is why his company is looking forward to being added to some prominent ETFs and indices such as the
in the coming year. He said that size matters a lot and far more investors will be investing in American Capital once it's a part of these key investment vehicles.
When asked how the economy affects his company, Schorsch said American Capital is built to be durable in any economy. He said the company doesn't have tenants in the volatile electronics or bookseller space, for instance, and sticks with more stable clients including the federal government and
Finally, when asked about acquisitions, Schorsch said he's projecting $1 billion in new acquisitions this year, which should translate to a 16% earnings per share growth year over year. He said that goal should be easily attained.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer said that despite the best efforts of Washington to keep our economy down, even a completely dysfunctional government isn't enough to stop the good things happening across our nation.
Whether it's a resurgence in auto sales after a depression-like slump, or rising retail sales or the boom in housing and oil and gas, good things seem to be happening, noted Cramer -- even though no one in Washington other than
Chairman Ben Bernanke seems to be working towards job creation.
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-- Written by Scott Rutt in Washington, D.C.
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