Cramer Bullish on the Dow for '09 -- Part II

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Du Pont (DD): I am greatly concerned about the dividend of this company, given its exposure to housing and autos -- far more substantial than other chemical companies, especially PPG (PPG) and to a lesser extent Dow (DOW), even after PPG's recent earnings blowup and Dow's big problems.

While it has a healthy ag business, which was worshipped earlier in 2008 but now doesn't even seem to matter, Du Pont has a drug business that is about to have a nasty patent loss. All that said, if housing bottoms in 2009, you are going to see some stabilization and the stock moving up to between $31 and $33. Could be worse to own, but if it goes there, PPG will go to $60 -- it's the better stock to own.

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General Electric (GE): As an owner of shares in GE as part of my compensation package from CNBC, I feel torn on this one. The company has drawn a line in the sand on the dividend for 2009, but no such line in 2010. That said, I believe the company can weather the storm and will fix its balance sheet's problems by continuing to shrink its problematic finance division.

I sure wish the bonds would rally, as that would make me more confident of the upside. I believe GE will rally back to where Buffett bought stock -- call it $20 -- and then will stall out as worries about the dividend in 2010 cloud the stock's progress.

This is a company that has benefitted from the Fed's plans and will continue to do so. What it needs to do is make an acquisition -- perhaps in infrastructure or health care -- to help shrink the size of finance as a percentage of the whole.

At the time of publication, Cramer was long Chevron, General Electric and PepsiCo.

Cramer's 2009 Dow Outlook Company Target 2008 Close % Change Dow Point Change CAT $55.00 $44.67 18.78% 82.3 CVX $82.00 $73.97 9.79% 64.0 KO $49.00 $45.27 7.61% 29.7 DIS $26.00 $22.69 12.73% 26.4 DD $32.00 $25.30 20.94% 53.4 GE $20.00 $16.20 19.00% 30.3 Source: TheStreet.com

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Be sure to check back all week for the rest of Jim Cramer's 2009 predictions for the Dow components. To keep up with what Cramer is trading daily, take a free trial to Action Alerts PLUS, and for a limited time, get $50 off the price of the annual service. Email [e-mail] for a free trial or go to www.actionalertsplus.com to sign up online.

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