Skip to main content

Editor's note: This column is an update of a portion of the "Mad Money" episode that aired June 15. Click here to read the full Mad Money Recap for that episode.

Commodities have been folded, spindled and mutilated by crazy Uncle Ben, but now that the market's got its groove back, I think it's time for us to go value hunting. I'm not saying that commodities are coming back up, but I am saying that as we recover from a massive, panicked selloff, we can pick among the rubble for good stocks before they stop being rubble and start being hot again.

We had the panic, and now it looks like the panic is over. People don't care about the big macro indicators anymore, they're looking at individual stocks, and what they see are stocks that look too cheap.

But Cramer, in his never-ending quest for cheapness -- my dad would drive an extra 10 miles to buy cheaper gas when I was growing up, it's in my bones -- has found you two commodity stocks that are even cheaper than they look on paper.

How does that happen? How do you hide value? Two words: special dividends. I've got two companies --


(NUE) - Get Nucor Corporation Report

for steel and

Freeport McMoRan

(FCX) - Get Freeport-McMoRan Inc. Report

for gold and copper -- that have a long and delightful history of paying out special dividends. These special dividends don't show up on paper.

They're not scheduled, they're not part of that dividend yield you see on


Finance. But when they get paid out, the money doesn't look any different from the cash you get from a regular dividend.

Nucor and Freeport McMoRan are my favorites for their special dividends and their assets.


Scroll to Continue

TheStreet Recommends

(CEO) - Get CNOOC Ltd. Report

, the Chinese oil company, also has a good special dividend habit, but I just

recommended it a couple days ago for its enormous horde of cash, and the stock's already up 10% since, so let's take some profits and give ourselves a pat on the back before moving on.

We'll start with Freeport, which owns the Grasberg mine in New Guinea; that's the largest gold mine on earth. It means Freeport owns New Guinea, which gives the company about a 30% stake in the Indonesian government. It had better political market share under Suharto, but what can you do?

Most recently, it paid out a special dividend on March 31, which brought the special dividend total up to $2.25, paid out in five separate payments since December 2004. If you look Freeport McMoRan up on Yahoo! Finance, you'd only see a $1.25 a year dividend; as you can see, the actual payments are a whole lot higher.

Aside from Freeport's propensity for paying special dividends, which makes the stock look a lot cheaper than it looks on paper, it's just too cheap. It's got 36.5 billion pounds of copper, 39.8 million ounces of gold and 115.1 million ounces of silver. Given those assets, this stock is cheap.

You do


need to believe that prices for gold, copper or silver will recover in order to believe in Freeport, because at about $47 a share, the stock is trading just $7 over where it was near the end of 2004. Now, back then, gold was worth about $440 an ounce. Even after its sickening decline, gold is still worth $578 right now, making Freeport a steal by historical standards.

Now, how about Nucor? You've gotta love these guys. They bump up their earnings guidance on Tuesday, and the stock doesn't even really come up on the news until Thursday. Nucor's paid out $1.50 in special dividends in the past year. The most recent was 50 cents on March 29. It's paying another 50-cent special dividend on Aug. 11 to shareholders on record as of July 30, so you've got time to get in on it. Again, go to Yahoo! Finance or any other Web site, and it will tell you Nucor pays out a 40-cent annual dividend. These special ones are hidden, and they're great.

Now, I know you might not like the steel business right now, but keeping in mind Nucor's special dividend proclivity, let me give you the selling points.

First, raw materials costs aren't rising as quickly as Nucor expected. Second, it's levered to non-residential construction spending, which, in contrast to residential spending, is still very strong.

And let's not ignore Nucor's $2.2 billion of cash, which the company is actively using to buy back stock every single day, according to management. That must just beat the stuffing out of the shorts, who hold about 4.6% of the float. Right now the stock is cheap, and if in the future it pays out special dividends like it has done in the past, then the yield isn't less than 1% like you'll see if you look the stock up; it should be closer to 5%, and that's better than a sharp stick in the eye.

You want to bring well-mannered stocks, ones that have the grace to pay special dividends, home with you. We like companies that have good habits, habits like paying special dividends. Both Freeport McMoRan and Nucor fit the bill of stocks that are going up and are cheaper than they appear, given their love of giving shareholders unexpected, special cash.

Find ex-dividend dates, amounts, and yields -- by company -- with TheStreet's Dividend Calendar >>

Image placeholder title

At the time of publication, Cramer was long Yahoo!.

Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click

here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click

here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click

here to get his second book, "You Got Screwed!" and click

here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by

clicking here. has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from