Jim Cramer Recommends Verizon

Mad Money host Jim Cramer is known for promoting high-flying growth stocks like Apple (AAPL: 116.47 +0.14%), Netflix (NFLX: 360.28 -2.14%) or Chipotle Mexican Grill (CMG: 657.88 -0.75%). That made yesterday’s buy recommendation of the worst performing stock in the worst performing sector probably all the more surprising.

 

VZ shares are down an amazing 18% this year. However, Cramer believes Verizon Communications (VZ: 50.21 +0.04%) warrants a buy despite the fact that the stock has is underperforming the market.

 

Wall Street analysts also seem to be very cautious on Verizon right now, with 21 analysts rating the stock a “hold” versus only 13 analysts recommending it as a “buy”.

 

Verizon does appear to have an ace in the hole that could prove to be a very powerful catalyst for its stock. Rumors have been intensifying that Verizon will begin selling the Apple iPhone beginning in 2011.

 

The new iPhone 4 reportedly sold 1.7 million units in the first three days. Consumers love the iPhone, but have been less-than-pleased about having AT&T (T: 35.28 0.00%) as their sole provider option.

 

Currently only 17% of Verizon’s subscribers have smartphones. That leaves significant opportunity for market growth.

 

Verizon is very familiar to dividend investors since it boasts the Dow Jones index top dividend. Jim Cramer views the stock’s 7.1% dividend yield as one of its most attractive traits. He recommends investors buy the stock, especially if the stock drops following their earnings release.

If you enjoyed this article then we invite you to subscribe to our free dividend newsletter.

  

Leave a Response: