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Editor's note: This is the conclusion of Jim Cramer's review of the prospects for the stocks that make up the Dow 30. Be sure to read Part 1, Part 2 and Part 3.


(MRK) - Get Merck & Co., Inc. Report

: My favorite investment in 2006 is in the tort bar, which will have its day picking apart the carcass that is Merck. I also don't believe that Merck is going to get that holy grail of a cervical cancer drug through the Food and Drug Administration this year, which is where the upside is.

Now is a good time to sell

I believe that Merck will be fighting to maintain its dividend this year and fighting to maintain any earnings growth. The Street is way too optimistic about these guys and the litigation strategy, which is awful.

I want to pay no more than 10 times earnings for its $2.50 in suspect earnings power. Really good time to sell this stock, right


Just has to go up


(MSFT) - Get Microsoft Corporation Report

: If Microsoft doesn't go up in 2006, it's never going to go up. There, I said it. I see this company selling at 20 times $1.60 and ramping to $32, which isn't much of a ramp but is better than what it has been doing. You have Vista and Xbox 360 for all of 2006, two new operating systems! You have some rationalization to its communications strategy -- MSN? And you have some sense that maybe it can make some inroads on the Web just because we don't want





TheStreet Recommends

(GOOG) - Get Alphabet Inc. Class C Report

to win the whole game. It is amazing that Microsoft is still so arrogant after all the bludgeoning it has received. When will this company grow up?

Lost its mojo


(PFE) - Get Pfizer Inc. Report

: Prepare to be disappointed again in the growth and in the management. There really is nothing here, nothing to own nothing to be proud of. I'll pay 12 times its $2.00 in earnings power, no more than that, and I believe that a lot of its older drugs really have nothing cooking but losses. Pfizer needs to do a merger to hide this lack of growth, but it won't do one fast enough to rescue it from a flat-lining at $24. This is still another company that doesn't have its mojo. I really am disappointed in this company's inability to develop new drugs. It feels like the Pfizer of the '80s, not the Pfizer of the '90s.

Procter & Gamble
Much upside already priced in

Procter & Gamble

(PG) - Get Procter & Gamble Company Report

: This company will surprise positively with the Gillette deal, and I believe that the $2.60 earnings estimates are way too low, with $2.70 being possible. Can it get 24 times that? I don't know, that could be a stretch. As I look at this company, one that I have liked very much, I realize that much has already been priced in. I don't know if it can trade north of $65 totally on its best-of-breed status. That 6-point gain may not be enough to keep people involved, and I wouldn't be surprised to see some Procter ennui developing. I know I want to start scaling out for my

ActionAlertsPLUS charitable trust because I am feeling piggish. In the end, it is just toothpaste, razors and shampoo.

United Technologies
A go-to name this year

United Technologies

(UTX) - Get n.a. Report

: I believe this is the year people will recognize that United Tech is among the most consistent worldwide growers we have. Can't give it a 20 multiple; the economy's too slow worldwide for that. But I believe that people will pay 19 times United Tech's $3.50 in earnings, with a chance that those numbers go as high as $3.60. Maybe $67 is in the cards. This will be another name that people will buy every time the programs clobber the averages. It is the best-run company in the


, save P&G, and it would deserve to trade for 20 times earnings if it didn't have so much cyclicality. It'll be a go-to name in 2006.

Expect no earnings growth


(VZ) - Get Verizon Communications Inc. Report

: If this company had done what


(AT) - Get Atlantic Power Corporation Report

did and given us wireless and wireline, I would actually endorse it. But it can't because it doesn't even own the wireless division, and it's building out the wireline in a fated attempt to catch


(CMCSA) - Get Comcast Corporation Class A Report

, which isn't even doing that well anyway. I see no earnings growth here at all, $2.50 in earnings power, and if it weren't for that dividend, you would be paying no more than $25 for it. The dividend will keep the stock at $30, but no more than that. What a sad-sack stock this one is.

Will remain upward bound


(WMT) - Get Walmart Inc. Report

: All of the fines, all of the judgments, add up to about a quarter of an hour's worth of sales in a Sam's Club, so stop fretting. Wal-Mart's not going to be able to grow its way out of its morass, but it is cleaning up its stores and becoming much more like


(TGT) - Get Target Corporation Report

, which we love. I believe the company still has much work to do in making its places look better, but it is no longer in denial and believing that its stores are attractive to look at. It also is getting into the warranty biz, which has nice margins. I continue to believe that it will remain on an upward path. Let's say it can earn $2.60 and give it a multiple between 20 and 21; that allows the stock to drift up to $55, and I would take it anytime the stock fell back to $47, where it seems to want to go of late.

Has lost its pizzazz


(DIS) - Get Walt Disney Company Report

: Holy cow, another challenging year for this company, which seems like it just doesn't have enough oomph to make anything happen. Great brand names seem to have lost so much pizzazz and I don't believe that Disney's different. The simple truth is that Disney is another company that is being emasculated by pirating, digitalizing and an overall challenge made by tech that will give us more agita in 2006. I don't know how it can trade north of $28 on $1.40 earnings power. Alas, it should have sold to Comcast, because that's how it was going to get there. Another disappointing year despite the new stewardship.

This is the conclusion of Jim Cramer's review of the prospects for the stocks that make up the Dow 30. Be sure to read Part 1, Part 2 and Part 3.

At the time of publication, Cramer was long Microsoft, Procter & Gamble and Yahoo!.

James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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