dividend increase 24, Bear Market Shopping List

Jim Cramer of TheStreet.com spent the weekend screening S&P 500 stocks, looking for companies selling below the market's P/E of 16 with an above-average 3.75% yield and a dividend that he thinks is not only sustainable but can grow.

Immediately, that eliminated oil and oil-related stocks. And while there were plenty of stocks with yields north of 3%, there were few companies with yields over 3.75%. "I think we would all agree that anything less than 3.75% in this environment isn't enough protection given that it's pretty easy to see an 8% decline in the indices morph into an 11% selloff, so that's where I have chosen to make a stand," Cramer wrote.

"On average, these stocks are cheap on both last year's earnings and this year's estimates and they can afford to pay you that protection. They will most likely bounce on any good news and preserve the downside given how scant the yield is on the 10-year," he wrote. Cramer eliminated two high-yield stocks, Caterpillar and Seagate, over concerns about the companies as well as real estate investment trusts and utilities, with the exception of one stock.

The resulting list contains 15 stocks that Cramer feels you could buy now.

15 Bear Market Stocks To Buy Now

Note: Some of these have a higher P/E than the 16 Cramer said he screened for. You can read his comments on why he likes each of these here.

Pick Symbol P/E Div Yield
American Electric Power AEP 16.2 3.8%
Verizon VZ 10.8 4.8%
Ford F 10.2 4.9%
General Motors GM 10.7 4.9%
Tupperware TUP 12.0 5.4%
Ventas VTR 44.9 5.3%
Dow Chemical DOW 11.1 4.3%
Eaton ETN 11.2 4.5%
International Paper IP 17.3 4.8%
Diebold DBD 23.7 4.4%
Cummins CMI 9.2 4.5%
Kohl's KSS 12.8 3.7%
Pfizer PFE 23.1 3.9%
Prudential PRU 9.4 4.0%
RR Donnelly RRD 26.9 7.9%

In-the-money Covered Calls For Jan 29

If we plug those 15 stocks into Born To Sell's screener and look for weekly in-the-money covered calls for the Jan 29 expiration, we find several offering double-digit annualized returns for a 5 day trade:

Bear market stocks for Jan 29 expiration, in the money

At-the-money Covered Calls For Jan 29

If you prefer at-the-money choices for Jan 29, we have:

Bear market stocks for Jan 29 expiration, at the money

Out-of-the-money Covered Calls For Jan 29

If you want some upside potential then the out-of-the-money choices for Jan 29 are:

Bear market stocks for Jan 29 expiration, out of the money

Covered Calls For Feb 19

Going out a bit farther, to the Feb 19 expiration, we see that most of these have an earnings release before expiration (red dates, below). And a few have an ex-dividend date before expiration (green dates, below):

Bear market stocks for Feb 19 expiration

Note: These are not trade recommendations. They are candidate stocks from Jim Cramer. Do your own research, keep position sizes modest, and stay diversified.

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