“Buy, Buy, Buy”: Jim Cramer’s 3 Favorite Dividend Stocks Right Now

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Quick Read

Diamondback Energy (FANG) pays a $1.00 quarterly dividend with a 2.91% yield and focuses on profitability over production volume. Realty Income (O) offers a 5.74% yield with monthly dividends and has raised payouts 124 times since going public in 1994. Home Depot (HD) provides a 2.48% yield with $2.30 quarterly dividends backed by resilient renovation demand. Some investors get rich while others struggle because they never learned there are two completely different strategies to building wealth. Don’t make the same mistake, learn about both here.

As one of the pre-eminent voices on CBNC, when Jim Cramer talks, the market and investor world listens. "Mad Money" has helped propel Cramer into the stratosphere of legendary talking heads in the stock market, and he's guided his legion of followers through bear and bullish markets time and time again.

It's for this reason that when Cramer says you should buy one of his favorite dividend stocks, you should stop what you are doing and listen. Even though Cramer can't predict the future, if anyone could in the market world, he might very well be the one who can, and that's why looking at these three dividend stocks is well worth your time.

Cramer Loves Dividend Stocks Built for Strength and Stability

For anyone who follows CNBC regularly or has even caught Cramer while flipping through channels, his straight talk has been the key to his television success. You can push through the funny sound effects he uses to help make his point, as well as pounding the table for a stock. Still, you can't deny that he has always had one critical role: helping everyday investors who follow him to make money like seasoned market professionals.

To this point, Cramer often associates himself with growth and momentum names, but he's also frequently highlighted dividend-paying companies that focus on delivering steady income and long-term appreciation.

If you are an investor, like me, who wants to source a source of reliable cash flows while trying to stay as safe as possible, you might want to look at any of these three standout stocks he's talked about a lot lately. It's safe to say that all three of these names reflect some of Cramer's favorite themes: buy and own companies with the right amount of discipline, pricing power, and predictable performance.

Diamondback Energy

Cramer has been bullish on Diamondback Energy (NASDAQ:FANG) for months, and has repeatedly called it one of the best-run energy companies in America's oil patch. With a dividend yield hovering around 2.91% and an expected 11/13 payout of a $1.00 quarterly dividend for every share owned, it's understandable why Cramer is bullish on this energy name.

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What Cramer likely sees is that Diamondback Energy has figured out how to capture both income and upside during a volatile energy market. During a recent "Mad Money" segment, Cramer praised Diamondback's focus on efficiency and delivering shareholder returns, calling it a "lean, mean, cash-generating machine," which absolutely sounds like something Cramer would say.

He also points out that he likes the name because the company's management isn't "chasing barrels...they chase profitability," and it's why the company can pay you handsomely when oil price wobbles. Ultimately, Diamondback has been a standout performer in the Permian Basin, and its ability to balance growth with consistent dividend payouts has made it a favorite of Cramer for playing the energy sector without excessive risk.

Realty Income

The presence of Realty Income (NYSE:O) on this list really shouldn't surprise anyone who has been listening to Cramer anytime in recent history. The company, which has earned the nickname "The Monthly Dividend Company," has been a Cramer favorite for years and for all the right reasons.

What's more is that Cramer loves to highlight that not only does Realty Income have a dividend yield of 5.74%, but that its monthly payouts have been raised a ridiculous 124 times since the company went public on the NYSE in 1994. The most recent dividend payout was $0.2695, which won't knock your socks off, but consistency is the name of the game. Better yet, Realty Income is a growth stock that also combines a steady dividend payout, which makes it a diamond in the rough these days.

Cramer has often highlighted the company during his Income Investing discussions, pointing out its diversified real estate portfolio as proof that slow and steady can still win the race. "Reality Income is the perfect stock to get paid to wait," says Cramer, and he's spot on.

Lastly, he notes that the focus of Realty Income and REIT strategies in general is to focus on long-term net lease agreements with recession-resistant tenants, which helps paint a pretty strong picture of what future cash flow is going to look like.

Home Depot

One of Cramer's favorite "blue-chip fortresses," Home Depot (NYSE:HD) has long been a big name for him to discuss due to its strong management team and strong dividend. With a yield currently hovering around 2.48% and a quarterly cash payout of $2.30 per share, Cramer is on record calling Home Depot one of his top picks in the retail sector.

Ultimately, Cramer looks at the company's strength in home improvement sales and believes it's a reflection of America's housing economy. Even in slower markets, Cramer notes that renovation demand stays resilient and that the possibility of lower mortgage rates could reignite equity spending and contractor activity.

"Home Depot is what happens when you combine brand loyalty with capital discipline," says Cramer. Better yet, Cramer is even bullish on Home Depot's cash flow per share continuing to grow, which provides room for the company to boost dividend hikes and even stock buybacks.

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