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Cramer's 'Mad Money' Recap: The Bears Are Wrong

Written by: Scott Rutt 06/27/12 - 8:01 PM EDT
Tickers in this article: F FB DAL C AGNC XOM DIS WFC BMY MS UA T SAN DO AAPL GIS VZ KMR PWE VTR HEK MCHP LPSN KME DD SRZ PEP

In the "Executive Decision" segment, Cramer sat down with Debra Cafaro, chairman and CEO of Ventas(VTR) , a real estate investment trust specializing in senior living centers and medical office buildings. Ventas has been delivering compound annualized returns of 32.5% a year and is up 680%, including reinvested dividends, over the past decade.

Cafaro said Ventas is building a "framework for growth," noting that the company has a low cost of capital and a great team in place to both grow organically and through acquisition. Ventas is gaining scale, noted Cafaro, and is improving its balance sheet in the process.

When asked about the company's business and how it relates to debates over Medicare funding and health-care costs, Cafaro explained that Ventas is simply a landlord and the company's senior living centers, for example, are managed by Sunrise Senior Living(SRZ) and other experienced operators. "We collect rents regardless of what happens with Medicare funding," Cafaro added, which is why the company is able to deliver consistent earnings.

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Also adding to the company's strength is that Ventas serves the middle of the market, which makes its facilities accessible to middle-income seniors. Cafaro said 80% of her company's revenue stems from private paying tenants and not from government subsidies.

Cramer said he's been remiss in not recommending Ventas before as the company has been terrific for its shareholders. He recommended buying on any weakness.

A Cereal Dividend Booster

In a second "Executive Decision" segment, Cramer spoke with Ken Powell, chairman and CEO of General Mills(GIS) , the consumer packaged-foods giant that delivered a solid quarter Wednesday, but with conservative guidance.

General Mills also boosted its dividend by 8%, it's 12th boost in just eight years. Cramer currently owns shares of General Mills for his charitable trust, Action Alerts PLUS.

Powell said that while last year was challenging for General Mills amid some of the highest commodity inflation in 30 years, things are different now and commodity costs are trend below expectations. He said the environment overall is better and his company continues to innovate.