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NEW YORK (
) -- "Don't be scared of stocks," was Jim Cramer's message to the viewers of his "Mad Money" TV show Monday. He told investors that if they want to make smart, secure investments, they need to forget about bank CDs and low-yielding bond funds.
Cramer said his heart's "filled with sorrow" every time he hears about the waves of investors leaving stocks in favor of "safer" investments. He said that despite a 61% rally off the bottom, investors still seem to have lost faith in stocks as an asset class.
But Cramer called this sentiment "dead wrong," saying that investing in bank CDs yielding only 1.5%, or a 10-year Treasury bond yielding only 3.68%, is throwing money away. He said that high-yielding stocks offer higher returns, plus capital appreciation and the possibility of dividend raises to boot.
Cramer said the smart money is in dividend stocks, because dividends offer not only income, but a cushion against losses and a favorable 15% tax rate. He also noted that dividend stocks are often immune to short sellers, since they're required to pay the dividends on any shares they borrow.
With all of these great advantages, Cramer said dividend stocks are the way to go. For investors not sure which dividend stocks to pick, he recommended the
Blackrock Dividend Achievers Trust
, which is a basket of high-yielding stocks that currently yields 7.4%.
Cramer reminded viewers that they can double their money in just over nine years using dividends alone. "Don't be scared of stocks," he said, "just pick the right ones."
Pick High Yielders
Investors looking for a holiday gift that keeps on giving should turn to high yielding dividend stocks, Cramer told viewers. He highlighted three stocks that made his holiday wish list this year.
, a stock that Cramer called a serial, as well as a "cereal," outperformer. General Mills currently yields 2.8%, which may not seem like a lot; however, Cramer noted that after taking into account favorable tax status and compounding dividends, this stock has yielded 7.5% over the last 10 years. With earnings exceeding its dividend payout three times over, Cramer said this is one stock investors can own for the long term.
Next on the list, drug maker
. Cramer called this company a completely different animal after its recent acquisition of Wyeth. After cutting its dividend in half earlier in the year, Pfizer now yields 3.9% with lots of room to run. Cramer said investors need to own this stock by Feb. 2 in order to qualify for the company's next big payout.
Finally, Cramer recommended
, which currently yields 6.1%. Cramer said this company is the conservative way to play the mobile Internet "tsunami" of smart phone users as well as a turn in the company's traditional wire line business. Investors need to own AT&T by Jan. 5 to qualify.
In the "Executive Decision" segment, Cramer spoke with John Pinkerton, chairman and CEO of
, for an update on the natural gas business on the heels of
( XTO) last week.
Pinkerton called Exxon's investment in natural gas a "game changer," noting that the company is betting big on natural gas as a bridge fuel to the future. He said the natural gas business is also starting to make headway in Washington, where Congress is starting to see the potential of this American-made, low carbon alternative to foreign oil.
Pinkerton said that the natural gas industry always knew that there was huge quantities of gas in oil shale rocks, but until recently they simply didn't have the technology to extract it. However, thanks to American ingenuity and hard work, new technology has been developed which now offers access to trillions of cubic feet of reserves, he said.
Pinkerton said that next year alone, Range Resources will be adding 98,000 high paying jobs to its workforce in Pennsylvania. He said that with a national push towards natural gas in cars and trucks, the potential for American jobs is sizable.
Finally, when asked about potential environmental risks from oil shale drilling, Pinkerton said there has not been one study that linked gas drilling to contaminated water supplies. He said after countless studies, not a single well has ever resulted in contamination.
Cramer continued to throw his support behind both natural gas, as the fuel the country needs, and behind Range Resources, one of the best companies to help make natural gas a reality.
In a second interview, Cramer spoke with Sam Reed, chairman and CEO of
, on the heels of that company's acquisition of the privately owned Strum Foods.
Reed said that Strum fit perfectly into TreeHouse's national house brand strategy and he's happy to have the company's brands as part of their portfolio. He said while Strum has a great culture of innovation, the company lacked the scale and depth that TreeHouse can provide, making the combination another big win for the company.
Reed also commented on the company's turnaround since its choppy results earlier in the year. He said that TreeHouse has rededicated its efforts on creating value without compromising quality or service, and expanding the company's unique offerings. This strategy has been a big win for shareholders, said Reed, as evidence by its strong performance in recent quarters.
Looking more long term, Reed said the trend of large retailers creating their own house brands of quality products is not diminishing, which paves the way for a bright future at TreeHouse.
Cramer said the TreeHouse story is still a good one, and when the company issues a secondary offering in March, "I want you in it!"
In the Lightning Round, Cramer was bullish on
Cramer was bearish on
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was long Express Scripts.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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