Cramer Loves These Dividend Stocks

Jim Cramer’s Market Moxie

Jim Cramer, the charismatic host of CNBC’s Mad Money, has become a household name for investors seeking bold, actionable insights. Known for his high-energy delivery and colorful metaphors, Cramer blends deep market knowledge with an ability to distill complex financial trends into digestible advice. 

While he doesn’t exclusively focus on dividend stocks, his analysis often highlights companies with strong fundamentals, including those that reward shareholders with consistent payouts. Income investors, who prioritize steady dividends, can glean valuable nuggets from Cramer’s commentary, even if his focus leans more toward growth and momentum. 

His knack for spotting companies with robust business models and market relevance makes his picks compelling for those seeking both income and potential capital appreciation. Recently, Cramer has shared bullish views on the three dividend-paying stocks below, signaling that he believes they are good buys for investors seeking strength and stability.

Costco (COST)

Costco (NASDAQ:COST) is a standout in Cramer’s radar, and for good reason. In a recent Mad Money segment, he praised Costco’s unmatched customer loyalty and operational excellence, which underpin its ability to pay a reliable dividend (currently yielding around 0.7%) and occasional special dividends. He told a caller during the August 26 Lightning Round segment of his show, “I want you to buy more Costco here.”

Cramer highlighted Costco’s membership model, which drives consistent revenue, with renewal rates consistently above 90%. This cash flow stability supports its dividend growth, making it a favorite for income investors. He also noted Costco’s resilience in inflationary environments, as its bulk-buying model and private-label Kirkland brand keep costs low and margins strong. Cramer sees Costco’s ability to thrive amid economic shifts — whether inflation or consumer caution — as a reason to buy, especially as it continues to expand globally and boost e-commerce. 

The Mad Money host noted Costco can pass any increased product costs, like beef, onto the consumer because “they are about the membership, not about the price of beef.”

The stock’s steady appreciation, paired with its dividend, makes it a compelling pick for long-term portfolios.

Eli Lilly (LLY)

Eli Lilly (NYSE:LLY) has Cramer’s attention for its explosive growth and reliable dividend (yielding about 0.8%). In a recent discussion, he called Lilly a leader in the pharmaceutical space, driven by blockbuster drugs like Mounjaro and Zepbound for weight loss and diabetes. 

Cramer emphasized Lilly’s innovation pipeline, noting its ability to deliver life-changing therapies while maintaining profitability to support dividend growth. The company’s strong R&D investment, coupled with a robust balance sheet, positions it to weather patent cliffs better than peers. 

Cramer also highlighted Lilly’s soaring stock price, fueled by the obesity drug boom, which he believes has room to run as demand for GLP-1 therapies grows globally. 

During the August 26 Squawk on the Street episode of “Stop Trading,” Cramer pointed out how Lilly’s latest, late-stage trial results for orforglipron, the pharma giant’s oral formulation for weight loss and diabetes management, reported blockbuster results for the patient population experiencing both conditions. 

He said, “This trial is dramatic because if you exclude that population and you take a pill and you and you’re heavy, you’re going to lose a huge amount of weight. This is a gigantic win. Is it worth $31 (meaning, the jump its stock price was witnessing)? No, it’s probably worth maybe $80 to $90.”

For income investors, Lilly’s consistent dividend increases — 11% annually over the past decade years, but over 18% over the last five — make it a growth-and-income play that Cramer loves for its market dominance and forward momentum.

CVS Health (CVS)

CVS Health (NYSE:CVS) rounds out Cramer’s trio, with its 3.6% dividend yield catching his eye as a value play in healthcare. In his August 25 Mad Money episode, Cramer lauded CVS for its diversified business model, blending retail pharmacies, health insurance through Aetna, and pharmacy benefit management. 

He argued that CVS is undervalued, trading at a low price-to-earnings ratio compared to peers, despite its strong cash flows that support its generous dividend. Cramer pointed to CVS’s strategic shift toward healthcare services, like in-store clinics and telehealth, as a growth driver in a post-pandemic world. He also noted its resilience against economic headwinds, as healthcare remains a non-discretionary sector. 

Cramer said it was a confluence of factors benefiting CVS: It “leads the entire cohort fixing its most problematic business — managed care — and seeing real strength in other parts of the business, especially the pharmacy side where it is the last man standing. Plus, given the cheapness of the stock generosity, the dividend yield. Here’s what I’m saying. Buy CVS.”

For Cramer, CVS’s combination of a high yield, defensive positioning, and growth potential makes it a buy for investors seeking income and recovery upside.

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