Cramer's game plan: 'Get ready to ride through these troubled waters'

An inverted yield curve is not an automatic signal that a recession is around the corner, and investors should be aware that there are bargains on the market, even if the economy is slowing down, CNBC's Jim Cramer said Friday.

Three-month Treasury yields surpassed 10-year Treasury notes Friday and the major U.S. indexes stumbled as the S&P 500 finished its worst day since January. The Dow Jones Industrial Average, pushed by bank stocks, dropped 459 points and the S&P 500 lost 1.9 percent, and the Nasdaq Composite fell 2.5 percent during the session .

Cramer blamed the selling in large part on computer algorithms because yield curve inversions in the past have preceded recessions, most recently in 2007. But he said the machines have no way of differentiating one stock from another.

"People act like this automatically signals that we're going into a recession, but it might signal nothing more than the fact that the Fed should never have tightened in December," the "Mad Money" host said. "We're headed into another week where I think the inverted yield curve will embolden the bears ... [but] the Fed just took us one rate hike too many and now we're all paying the price."

Cramer suggested that investors "stay the course," and concerned investors should stick with stocks that have the safest dividend yields "and get ready to ride through these troubled waters."

His game plan for next week is below:

Monday: Apple, Red Hat

Apple: The iPhone maker will reveal new products on Monday and Cramer said it's time for the tech giant to beef up its services. And he warned, given the stock's run as of late, that the Apple bears are itching for an announcement that's a let down.

"I want them to buy Dexcom and Tandem Diabetes so they can offer diabetics a blood sugar monitor-slash-insulin pump that can be controlled from you cell phone," he said. "I like this idea better than one more video channel, but if Apple's working on a multi-media bundle I could see why that's intriguing."

Red Hat: Red Hat, the software company that IBM is buying, reports earnings after the close.

"All I want to hear from them is how the business is doing across all clouds, not just IBM's since the merger was announced," he said.

Tuesday: Carnival, Cronos, KBHomes, Ollie's Bargain Outlet, Adobe

Carnival Cruise Line: The cruise company delivers its latest earnings before the bell. Cramer said it will be tough for Carnival to top Norwegian Cruise Lines, but he suggested it's a buy highlighting the 3.54 percent yield.

"I would pick some up with the understanding that things can't be that bad for Carnival if Norwegian's doing that well," he said.

Cronos: Cronos also plans to give quarter results before the market opens. Altria paid $1.8 billion for 45 percent of the cannabis company.

"I love this cannabis theme. Larry Merlo from CVS is introducing cannabidiol-based products, that's CBD, and I wonder whether some of it will eventually come from Cronos," he said. "That said, I still favor Canopy."

KB Home: The homebuilder has an earnings call scheduled after the bell. The company gives a good look into California's real estate market, Cramer said.

Ollie's Bargain Outlet: Shareholders will hear from the retail chain after trading ends Tuesday.

"It's cheap. It's down 18 points from its high for no particular reason. It's go some short sellers saying something about it," he said.

Adobe: Adobe holds an analyst Q&A.

"I bet we'll start hearing a lot of good things to make you want to buy the stock regardless of the inverted yield curve," Cramer said. "If I'm right, the pin action could very quickly spread to the other cloud names."

Wednesday: Lennar, Paychex

Lennar: This homebuilder, which gives a better picture about the national market, reports Wednesday morning.

"I think that the last few months have untethered the housing market from anything except mortgage rates and right now mortgage rates are plummeting, so it might be a better time to buy yourself a home or stock," Cramer said.

Paychex: Pachex will report before the open and the giant payroll processor should give investors an idea how the economy is humming or cooling, Cramer said.

"Their last quarter was a fine one. I think this one will be, too," he said.

PVH: PVH holds a collection of recognizable brands such as Van Heusen, Tommy Hilfiger, and Calvin Klein, among others. The company's earnings report comes after the market close. It's a stock with a good story, but there are detractors waiting for it to trip, Cramer said.

Lululemon: After the bell, Lululemon will reveal its latest quarter results.

"I think Lululemon has the best momentum in the [apparel] group," he said.

Thursday: Accenture, Footlocker

Accenture: Accenture is expected to report its last quarterly financials before trading opens Thursday.

"This information technology consulting company is terrific at helping clients trying [to] go digital. But, you know what, when it reports it tends to get hit. And then when it gets hit, you do some buying."

Foot Locker: The sports apparel chain hosts an analyst meeting Thursday. The company beat same-store sales and profit estimates in its earnings report earlier this month.

The meeting could give motivation to pick up shares of Nike, which also gave a good report but a tepid forecast, Cramer said.

"I thought Nike was simply under promising and certainly will over deliver," he said. "Apparently China has discovered jogging, which is the sweet spot for the company ... If Foot Locker tells a good story, Nike's stock can run. I would buy Nike ahead of the meeting."

Friday: Carmax, Lyft

Carmax: Carmax's earnings report will give more insight into a weak auto industry, the host said. The used-car dealer will reveal results before the open and could disappoint again, he added.

"I wish I could be more positive about this giant auto retailer that's run so well, but the numbers probably won't add up," Carmer said.

Lyft: Lyft will officially list under LYFT on the Nasdaq to close out the week, and Cramer said it will be "absurdly oversubscribed."

"If you can, I think if you can get in on a piece of the action, you should do it. If you're going to buy it in the after market, you have to use a limit or I'll never forgive you," he said.

WATCH: Cramer details his game plan for the March 25 trading week show chapters Cramer's game plan: 'Get ready to ride through these troubled waters'    1 Hour Ago | 11:32

Disclosure: Cramer's charitable trust owns shares of Apple.

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6 Monthly Dividend Stocks to Buy

[Editor’s note: This article was previously published in January 2019. It has been updated and republished.]

Most dividend stocks pay their shareholders quarterly, but a few dividend-yielding stocks offer monthly distributions. The group is small: less than 100, with many of the offerings being exchange-traded funds (ETFs) or closed-end actively managed funds. And so investors looking for monthly dividend stocks to buy are limiting their universe quite a bit.

And there are quite a few attractive dividend-yielding stocks that pay out monthly. Several offer compelling cases for both their upside and safe dividends, with attributes that go beyond simply the timing of their distributions.

These six stocks all fit that bill, offering not only monthly dividends but potential share price appreciation and reasonable payout ratios.

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Realty Income (O)

Realty Income (NYSE:O) is the best-known of the monthly dividend payers, to the point that it has trademarked the slogan “The Monthly Dividend Company.”

In terms of past performance, the monthly payouts have been just the cherry on top of a delicious sundae. O stock has returned — including dividends — an average of 15.8% annually since 1994, according to a recent investor presentation. It has been one of the best-performing real estate investment trusts in the market over that stretch.

O stock has become much more expensive over the past few months, bouncing more than 19% from February lows. But there’s still a nice bull case at the moment. O yields a bit over 3.7%,

The portfolio looks both safe and nicely diversified, with Walgreens Boots Alliance (NASDAQ:WBA) and FedEx (NYSE:FDX) being its two largest tenants. Considering Realty Income’s track record, it’s worth staying long.

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Source: Shutterstock

LTC Properties (LTC)

Like Realty Income, senior housing and healthcare property REIT LTC Properties (NYSE:LTC) has bounced nicely off recent lows. And like with O stock, there’s still a solid bull case for LTC even after recent gains.

With the “baby boom” generation aging, demand should stay strong. Meanwhile, LTC still yields 5.06%, though growth has been below that of most dividend-yielding stocks (it has been held flat for about two years now).

There are some risks here: investors are concerned that changing healthcare insurance reimbursement policies will impact LTC’s tenants. The stock actually hit a five-year low earlier this year as a result. But sentiment has improved — and should continue to do so. With LTC still trading at a reasonable 11.56 P/E, the bounce could continue. Add to that a 5.o6% yield, paid monthly, and it’s definitely worth a look.

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Source: Shutterstock

Shaw Communications (SJR)

Canadian telecommunications company Shaw Communications (NYSE:SJR) hasn’t posted particularly strong performance over the past few years. SJR actually has declined nearly 10% over the past five years — and has lost about 10% of its value over the past year alone.

There are some concerns about the wireless industry in Canada, much as there are in the U.S. But Shaw is growing nicely, with revenue up so far this year. Margin expansion hasn’t followed yet, but as Shaw continues to take market share, profit growth may follow.

But with a 4.34% dividend yield and an 20.04x forward price-to-earnings multiple, SJR isn’t pricing in much improvement. With 5G a potential catalyst in the mid-term, there’s a nice case for SJR stock at current levels.

Dividends are announced in Canadian dollars, which can affect the payouts received by American investors. Still, a monthly dividend, a 4%-plus yield and a potential upside provide a nice combination here.

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Source: Marriott Select Service Hotels via Flickr (Modified)

Apple Hospitality REIT (APLE)

Apple Hospitality REIT (NYSE:APLE) owns 241 hotels in the U.S. — 115 of the hotels operate under the Marriott (NASDAQ:MAR) banner, with the remaining 126 flying under the Hilton (NYSE:HLT) flag.

Those two strong brands underpin a strong portfolio. Geographic diversification limits downside risk as well. With an impressive 7.55% yield paid monthly, that makes APLE one of the best dividend-yielding stocks in terms of monthly income.

The story admittedly isn’t perfect. Growth has been relatively meager, and APLE’s dividend has stayed at 10 cents per share per month since a 2015 IPO. Investors would have been much better off buying either MAR or HLT, both of which have better than doubled from early 2016 lows.

But for income-focused investors, APLE looks like a strong pick.

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Source: Shutterstock

Pembina Pipeline (PBA)

Pembina Pipeline (NYSE:PBA) is the biggest company on this list and the riskiest. Pipeline companies generally are lower-risk plays in the oil and gas space, but Pembina does have some concerns. Canadian oil stocks have struggled of late, and Pembina levered up to acquire Veresen last year.

That said, there’s still a lot to like here. Earnings increased in the double-digits last year, largely due to the acquisition. PBA pays a solid 4.69% dividend. Valuation is relatively reasonable against U.S. rivals like Kinder Morgan (NYSE:KMI) and Plains All American Pipeline (NYSE:PAA).

If Pembina can continue to grow once the Veresen acquisition is fully integrated, there should be nice upside on top of the 4%-plus yield.

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Source: Shutterstock

STAG Industrial (STAG)

STAG Industrial (NYSE:STAG) isn’t necessarily a spectacular stock, but it’s one that can drive steady long-term returns along with monthly payouts. The company leases industrial buildings to single tenants and has a nicely diversified portfolio from both a customer and geographic standpoint. The average lease length currently is nearly five years, which should keep recent dividend growth intact.

Longer-term, there are minor concerns. Valuation isn’t necessarily cheap, at over 15 forward P/E. An economic downturn could lead to lease cancellations or even customer bankruptcies. Investors focused on value might want to wait for a cheaper price than the current stock price of $28.71.

But investors looking for growing monthly dividend payouts don’t have a ton of options, and STAG very well might be the best one.

As of this writing, Vince Martin did not hold a position in any of the aforemen