On tonight’s MAD MONEY on CNBC, Jim Cramer was talking about the decline and fall of the value of cash compared to being invested, and in particular how to avoid the value of the declining dollar. His answer here is chasing high yield stocks because you yield less and less in cash right now. He thinks this is even more the case with only 15% income tax on dividends.
His first stock noted was Consolidated Edison Inc. (NYSE: ED) with its 5.7% yield and steady and solid business in power supply. This jumped almost 1% after he noted it in after-hours to $41.38 and its 52-week trading range is $40.57 to $52.90.
His second stock is a US energy trust because the companies here (LP’s usually) do not pay taxes as long as they pay out almost all of their income. With oil prices staying high he likes the U.S. trusts better than the Canadian trusts because the 15% tax penalty for U.S. citizens that buy these. His favorite is the Permian Basin Trust (NYSE: PBT) because of a mix between oil and gas located in Texas. But this one has a 12% yield and he thinks it could actually become a higher yield. This popped 3% in after-hours to $20.00 after he talked it up, and that is above the 52-week range of $12.45 to $19.43.
A while back, Cramer gave some of his Canadian picks in the group he thought that could be acquired in the space.
Jon C. Ogg
March 5, 2008