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"This recession has only just begun," Jim Cramer warned viewers of his "Mad Money" TV show Wednesday.

He told them this is the worst market he's ever seen and advised them to sell into strength and stick only with the right stocks for this environment.

He told investors they should look for stocks with a sky-high dividend yield and management who can handle a recession.

One company that fits that bill is Eaton ( ETN), he said.

After sliding from a high of $99 a share, Eaton has slid to $39 a share and sports a 5.1% dividend yield. That slide is just too far, too fast, said Cramer. The company now trades at where it did in 2003, but it is a completely different animal.

Since 2003 Eaton has nearly doubled its revenues, improved its margins and raised its dividend 117%. The company has also prepared itself for a recession by diversifying out of autos, which accounted for 41% of the company's sales five years ago to 27% today. The company now focuses on electrical and fluid power systems, making components for a wide array of industries and applications.

Cramer reminded viewers of the power of reinvesting dividends by noting that reinvesting Eaton's dividends would double investors' money every 14 years, even without any stock appreciation.

He advised buying Eaton on a scale as it trends lower and selling portions if it trends higher.

Cramer: Apple's Juicier Than RIM

Clear Skies

Cramer spoke with Ronald Shaich, chairman and CEO of Panera Bread ( PNRA), a stock which he called one of the bright spots of a horrendous day.

The company reported its earnings Tuesday, beating estimates by two cents a share and reporting better-than-expected comparable store sales and gross margins.

Stockpickr

Cramer last recommended Panera on July 23 on the premise that the company's input costs have been falling. Since then the stock has fallen 13.6%, but Cramer said the company is still enjoying those cost savings.

Shaich called the impending recession a good thing for Panera, and one that the company has been preparing for over a year. He said the company has high customer satisfaction, a strong cash position and no debt on its balance sheet.

Shaich said he does not see the recession affecting Panera in a large way. He said while their customers may trade down on a car purchase, they will still eat at Panera on average three times a month.

Shaich admitted that the commercial real estate market is in a period of transition, with some developers delaying or pulling back on projects, but he called the market a great opportunity for strong companies.

He said the company sees no need for a stock buyback program and instead has chosen to use the money to expand its operations.

Outrage of the Day

Cramer added SanDisk ( SNDK) CEO Eli Harari to his "Wall of Shame" list of the worst executives, for his rejection of Samsung's takeover bid.

Cramer said any CEO who rejects an offer as generous as Samsung's, which valued the company at a 93% premium to its share price, is only looking out for himself and not for shareholders.

Am I Diversified?

Cramer spoke with with callers to see if their portfolios make the grade. The first caller's portfolio included Microsoft ( MSFT), Kraft ( KFT), Wells Fargo ( WFC), Reynold's ( RAI) and Proctor & Gamble ( PG).

Cramer said this caller is doing everything right, and was not concerned with the partial overlap of Kraft and P&G.

The second caller's top holdings included Clean Energy ( CLNE), Huntington Bancorp ( HBAN), Salesforce.com ( CRM), CBS ( CBS) and National City ( NCC).

Cramer flagged National City and Huntington as two banks that are just too risky for this market.

The third caller had ABB Limited ( ABB), Kraft ( KFT), KBR ( KBR), Pfizer ( PFE) and Quanta Services ( PWR) as their top five stocks.

Cramer identified three of a kind with ABB, KBR and Quanta in the engineering field. He said this portfolio needs a defense contractor or a financial stock.

Mad Mail

In this segment, Cramer told a viewer that he's worried about Genuine Parts ( GPC), and thinks that Monro Muffler ( MNRO) is the better auto parts play.

BankingMyWay

Lightning Round

Cramer was bullish on Duke Energy ( DUK).

Cramer was bearish on Dillard's ( DDS), Roper Industries ( ROP), Polaris Industries ( PII), Genworth Financial ( GNW), South Jersey Industries ( SJI) and Ametek ( AME).

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Read more of Cramer's Mad Money Lightning Round insights.

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At the time of publication, Cramer was long Kraft, Proctor & Gamble, Quanta Services.

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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