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After another day of market nausea, Jim Cramer told viewers of his "Mad Money" TV show that there's only one thing that can protect their capital: dividends.

He told viewers to look for companies with recession-proof businesses that have a good dividend, and a long history of raising that dividend.

Cramer used drug maker Merck ( MRK) as one shining example for his thesis. Merck currently yields 5.3% with its dividend, and while that's lower that than of Eli Lily ( LLY), 5.8%, and Pfizer ( PFE), 7.6%, Cramer said Merck is in the best cash position among the three, with a history of boosting its dividend, even during the bad times.

Admittedly, 2008 has not been a good year for Merck. There have been many questions swirling around the company's cholesterol drugs Vytorin and Zetia, its HPV and cervical cancer drug Guardasil has seen softer sales due to safety concerns, and it has tussled with the FDA over product labeling.

But Cramer said that even at a stripped down valuation, Merck is worth at least $29.90 a share, which is higher than its current value.

According to Cramer, Merck has the ability to grow and boost its dividend, even in a weakening economy. The company, which trades at the same level as it did last year, is about halfway through a cost-cutting plan aimed at stripping between $4.5 billion and $5.0 billion from its budget and has higher cash flows than last year.

Cramer said Merck's dividend pays investors to wait for the company's valuation to match its stock price. He recommended scaling into a position slowly around Merck's upcoming earnings announcement, and ahead of its analysts conference in December.

He said Merck's a buy any time its yield hits 5.5% or higher.

Cramer: Buffett's Buying, But Should You?

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