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Jim Cramer's 9 Dividend Stock Picks For Fixed Income Investors

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Mohit Manghnani
·2 min read
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Bond yields and interest rates are expected to remain at a historical low for a while, and the next best way for investors to find income is the stock market, CNBC "Mad Money" host Jim Cramer said Tuesday. 

“With my diversified dividend portfolio, you can get a 5% plus yield with the possibility of actual upside,” Cramer said. According to the former hedge fund manager, it’s still possible to get an income with a degree of safety in the current environment.

Cramer warned that investors should not chase high yielding stocks as more than 8% dividend yield resembles a red flag. “It tells you that there’s a lot of risk, and if you’re investing for income, risk is the last thing you want,” he added.

Dividends are like rewards that companies pay for holding a stock. Fast-growing companies like Amazon.com (NASDAQ: AMZN) and Tesla Inc (NASDAQ: TSLA) invest full profits back into the business for growth and expansion in lieu of a dividend payment, Cramer noted.

He put together a diversified portfolio of nine high-yielding dividend stocks that have a strong balance sheet.

Dow Inc (NYSE: DOW): It yields 5.02%. Cramer thinks the stock is a good performer and is likely to go higher due to polyethylene’s rising price.

See What Analysts Think about Dow

IBM (NYSE: IBM): It yields 5.17%. Though Cramer called IBM a controversial pick, he thinks that IBM’s Red Hat acquisition was smart, and the company is focusing on fast-growing future opportunities. IBM also named former Trump advisor Gary Cohn as vice-chairman recently.

AbbVie Inc (NYSE: ABBV): It yields 4.88%. The company has a great pipeline of drugs and two blockbuster drugs that are “growing like crazy,” as per Cramer.

B&G Foods, Inc. (NYSE: BGS): It yields 7.11%. The company has a steady cash flow. According to Cramer, with more people cooking during the lockdown, B&G brand foods are perfect for consumers.

Chevron Corporation (NYSE: CVX): It yields 5.93%. They have a strong balance sheet and Cramer thinks the company will do well under the Biden administration as it will be difficult to acquire new wells, making the existing ones more valuable.

Verizon Communications Inc. (NYSE: VZ): It yields 4.28%. Cramer called it a slow and steady grower.

In the utility stocks group, Cramer recommended American Electric Power Company Inc (NASDAQ: AEP) with 3.64% yield, Dominion Energy Inc (NYSE: D) with 3.45% yield, and Entergy Corporation (NYSE: ETR) with 3.93% yield.

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