Dividend Stocks Find a Floor

Dividend yields of 4 percent have been serving as a de facto floor for many stocks that have disappointed, “Mad Money” host Jim Cramer said Friday. “Four percent seems to be the level where, especially after taxes, you get a considerable benefit over bonds, and I have to believe that (Federal Reserve Chairman) Ben Bernanke knows that and embraces it,” Cramer said.

Cramer suggested keeping an eye on levels in the sell-offs, especially that investors seem to be convinced that a drop in commodity prices will hurt stocks broadly, even those that benefit from low commodity prices. “The floor of a four percent yield is just too darned uniform to be coincidental as long as Bernanke keeps rates low,” he said. “It’s a low level put, but it’s a put nonetheless, and it’s shown no sign of losing its luster even during yesterday’s hideous pasting.”

Source: CNBC

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