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Jim Cramer Highlights Lower-Risk, High-Dividend Picks for 2025

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  //stocks-investing.news-articles.net/content/202 .. hts-lower-risk-high-dividend-picks-for-2025.html
  Published in Stocks and Investing on Friday, November 21st 2025 at 19:03 GMT by CNBC

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Jim Cramer’s Three Lower‑Risk, High‑Dividend Picks for 2025

In a recent CNBC segment that aired on November 21, 2025, seasoned commentator and TV personality Jim Cramer took to the airwaves to highlight three stocks he believes offer the twin virtues of lower risk and attractive dividend yields. As investors wrestle with a volatile equity market, rising rates, and lingering inflationary pressures, Cramer’s recommendations provide a tempting blend of stability and income—an ideal fit for income‑focused portfolios, retirees, and those looking to hedge against market volatility.

Below, we distill the key points from the CNBC article and the supplemental links that accompany it, giving you a clear snapshot of why these picks stand out, what risks still exist, and how they fit into a balanced investment strategy.

1. Procter & Gamble Co. (PG)

• Dividend Yield: 2.5 %
• Payout Ratio: 67 %
• Annual Dividend Growth: 8 % (last 10 years)
• Market Cap: $350 B

Cramer hails Procter & Gamble as the quintessential “consumer staples” stalwart, citing its steady cash flow from a diversified portfolio of household brands such as Tide, Pampers, and Crest. The article links to the company’s Investor Relations page, where readers can review the Dividend Sustainability section that explains how PG’s robust free‑cash‑flow consistently exceeds dividend obligations.

What makes PG a lower‑risk play, according to Cramer, is its dividend aristocrat status—having increased dividends for 48 consecutive years. The CNBC piece notes that PG’s payout ratio sits comfortably below the 75 % threshold, suggesting ample headroom for continued growth even if a modest earnings dip occurs. The article also highlights a recent earnings release where PG beat analyst estimates, further cementing its fiscal resilience.

Cautionary Note: While PG’s dividends are sustainable, the article warns investors to keep an eye on commodity price volatility—which can impact the company’s raw‑material costs. However, PG’s hedging strategy mitigates this exposure.

2. Johnson & Johnson (JNJ)

• Dividend Yield: 2.7 %
• Payout Ratio: 60 %
• Annual Dividend Growth: 5 % (last 12 years)
• Market Cap: $480 B

The second pick is Johnson & Johnson, another dividend aristocrat and a healthcare behemoth with diversified operations in consumer health, pharmaceuticals, and medical devices. Cramer notes that JNJ’s dividend yield sits near the top of its sector, making it an attractive income generator.

Linked within the CNBC piece are JNJ’s Quarterly Earnings and a Dividend Sustainability Report, which show a consistent free‑cash‑flow margin of 27 %. The article emphasizes JNJ’s balanced product pipeline—with a mix of mature revenue‑generating drugs and promising clinical candidates—which reduces business‑cycle risk.

Key Risk Factors: The article includes a link to a Bloomberg analysis of the pharma regulatory environment, warning that increased scrutiny over drug pricing could compress margins. Nevertheless, Cramer believes JNJ’s dividend policy remains solid given its historically low payout ratio and strong balance sheet.

3. PepsiCo, Inc. (PEP)

• Dividend Yield: 3.2 %
• Payout Ratio: 73 %
• Annual Dividend Growth: 10 % (last 9 years)
• Market Cap: $250 B

Cramer’s third pick is PepsiCo, an iconic consumer‑goods giant that straddles food & beverage and snack categories. PepsiCo’s dividend yield is among the highest in the S&P 500, and the CNBC article links to PepsiCo’s Investor Relations page for an interactive Dividend Growth Chart.

The article cites PepsiCo’s steady demand for staples like Pepsi, Lay’s, and Gatorade—especially in the face of shifting consumer preferences toward healthier choices. PepsiCo’s payout ratio of 73 % is justified by its robust free‑cash‑flow and a diversified revenue mix that includes both high‑margin beverage categories and rapidly growing snack lines.

Macro Context: The article links to a CNBC commentary that explains how lower interest rates have increased the appeal of high‑yield stocks like PepsiCo. The macro‑economic backdrop—with interest rates hovering around 4.5 % and inflation easing—has made dividend yields more valuable to income seekers.

Why These Stocks Are “Lower Risk”

1. Diversified Product Lines
   All three companies boast diversified revenue streams—whether it’s consumer staples, pharmaceuticals, or beverages—diminishing exposure to any single market shock.

2. Dividend Aristocrats
   Procter & Gamble, Johnson & Johnson, and PepsiCo have each increased dividends for at least 10 years, indicating a proven track record of generating sustainable cash flow.

3. Healthy Balance Sheets
   Low debt‑to‑equity ratios (PG ~0.3, JNJ ~0.6, PEP ~0.4) provide ample financial flexibility to weather downturns and continue dividend payments.

4. Consistent Earnings Growth
   The article’s linked earnings data shows each company’s earnings growth exceeding 4 % annually over the past decade, reinforcing their lower risk profile.

Potential Pitfalls and What to Watch

• Commodity Prices & Input Costs
  Procter & Gamble’s exposure to raw‑material costs can impact profitability, though the company’s hedging strategy mitigates this.

• Regulatory Scrutiny
  Johnson & Johnson faces drug‑pricing pressures and ongoing litigation risks that could affect cash flows.

• Consumer Preference Shifts
  PepsiCo must adapt to increasingly health‑conscious consumers, but its snack portfolio is already trending toward healthier options.

• Dividends vs. Growth
  A high payout ratio (especially for PepsiCo at 73 %) leaves less room for growth reinvestment, which could limit future capital appreciation.

The CNBC article includes a side‑bar that directs readers to an Investopedia guide on Dividend Sustainability, encouraging investors to evaluate each company's payout ratio, free‑cash‑flow, and debt levels before adding these stocks to their portfolio.

How to Integrate These Picks into Your Portfolio

1. Income Allocation
   Allocate 10–15 % of a diversified portfolio to these high‑yield staples for a steady cash stream.

2. Tax Considerations
   The article links to a IRS tax guidance section that reminds investors of the tax treatment of qualified dividends (20 % for most U.S. taxpayers).

3. Risk‑Reward Balance
   Pair these lower‑risk, high‑yield stocks with a small allocation to growth or high‑beta sectors for a balanced approach.

4. Reinvestment Strategy
   Reinvest dividends through a Dividend Reinvestment Plan (DRIP) to compound returns over time—an option highlighted in the CNBC article’s “Investment Tools” section.

Final Takeaway

Jim Cramer’s spotlight on Procter & Gamble, Johnson & Johnson, and PepsiCo underscores a broader market sentiment: in a world of uncertain interest rates and lingering inflation, steady cash flows and reliable dividend payouts become all the more valuable. These three lower‑risk, high‑yield stocks offer a combination of consumer staple stability, pharma resilience, and beverage dominance that can help investors generate income while maintaining a robust risk profile.

Whether you’re a seasoned income investor or a novice looking to build a safe‑harbor layer in your portfolio, the article’s thorough data links and supplementary resources make it easy to dive deeper into each company's fundamentals. As always, remember that no stock is entirely risk‑free—so consider your own risk tolerance, investment horizon, and diversification goals before adding any of these stalwarts to your portfolio.