Given today’s uncertain market environment, investors can best protect their portfolios with dividend-paying stocks, said Jim Cramer on CNBC’s “Mad Money.”
Cramer likes dividends for a number of reasons. Compared to U.S. Treasury bonds, investors can get a much higher yield with dividend-paying stocks. By comparison, income generated by dividends is taxed at a much lower rate, too. Also, the U.S. government isn’t likely to raise the yield on bonds, but companies often boost their dividends.
After considering the power of dividends, Cramer devised a portfolio of dividend-paying stocks for today’s market environment.
To compile his list, he consulted the New York Stock Exchange Century Club, which recognizes successful American companies of 100 years or more. Then, he narrowed his list to companies that raised their dividends every year since 1980.
Of those 19 companies, Cramer looked for businesses that grew their dividends at the fastest compound annual rate. He also made sure to include a range of sectors.
In the end, Cramer was left with the five following stocks — he only recommends buying these stocks on a pullback, though.
Read on for Cramer's Top 5 Dividend Stocks
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