Jim Cramers 9 dividend shares with a possible uptrend
With bond yields and interest rates expected to remain at historically low levels for as long as possible, the best market for investors to get any income is the stock market, said Jim Cramer of CNBC.
“Forget about the bond market. If you want income, you have to find it in stocks,” he told Mad Money viewers on Tuesday. “I decided tonight to put together a diversified portfolio of high yielding stocks that I trust have some upside potential too because I want you to know that in this environment it is still possible, to some extent to generate income for security. “”
Dividend stocks classify companies that regularly share a portion of their profits with investors, distributed in the form of cash and sometimes additional stocks.
“With my diversified dividend portfolio, you can get a 5% plus return with the possibility of an actual uptrend,” said Cramer. “If you want income, this is a much better deal than CDs or Treasuries.”
Cramer’s dividend stocks for this environment:
As part of Cramer’s philosophy for dividend portfolios, investors shouldn’t take too much risk when looking for stocks with dividend yields. Stocks yielding more than 8% are red flags, he said, warning that high yields could be cut or the stock price could fall.
Cramer said a stock that returned 4% would be ideal.
“When you see a stock that is yielding north of 8%, it usually means the smart money isn’t getting anywhere,” he said. “It tells you there is great risk and when you are investing in income, risk is the last thing you want.”
Companies pay dividends to shareholders as rewards for owning the stock. The payout, which can be scheduled monthly, quarterly or annually, is determined by a company’s board of directors and serves as a source of income.
Some mutual funds and exchange traded funds also offer dividends to shareholders. Many new and rapidly growing tech companies, including Amazon and Tesla, often reinvest full profits back into the company instead of paying dividends to offset growth and expansion, which is often accompanied by a surge in stock price.
Disclosure: Cramer’s charitable foundation owns shares in Amazon.
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