Editor's note: This is Part 2 of Jim Cramer's review of the prospects for the stocks that make up the Dow 30. Be sure to read Part 1 and Part 3 and Part 4.

Caterpillar ( CAT): This company is so misunderstood. People somehow believe this is a play on domestic housing. No, no, no! It is a play on alternative energies that made no sense until oil breached $40.

With the stock at $58, there are more orders from major non-oil energy companies than Goodyear ( GT) can make tires for. Plus, I believe that steel costs are coming down, which means that earnings could explode to the upside.
Caterpillar
Not just a housing play

I see $5 in earnings for Caterpillar in 2006, and I am tempted to pay 18 times that for the stock, which puts this sucker at $90. OK, maybe that's extreme, given the flat-lining in housing and the strong dollar -- too strong, which is going to help Kubota ( KUB), its competitor. So, let's say $80, and you have one giant, well-performing metal bender.

Citigroup
Expect its multiple to expand in 2006

Citigroup ( C): At last this company is out of the penalty box. This is another company that spent more time meeting with lawyers than with investors in the last four years. That's about to change, although I don't believe that Chuck Prince can grow this company the way I would like it to grow. That's why I see Citigroup buying Goldman Sachs ( GS) and becoming a much bigger international presence. In the meantime, I don't expect any real earnings surprises, just multiple expansion, the kind that always comes for financials when the Fed stops tightening. I believe $4.50 is doable, and this year people will pay a couple of multiple points more for that $4.50 as they solve for M, as in M (multiple) times E (earnings) equals P (price). Yes, I believe this stock could trade as high as $60, and it will be a great financial to own.

Coca-Cola
Not much reason to smile here

Coca-Cola ( KO): Nope, another crummy year is on target for this faded blue-chip. Can we stipulate that Pepsi ( PEP) should come into the Dow and Coke go out? Can you believe how much wealth Pepsi has created between its restaurant spin-out and its snack and beverage divisions? Maybe Coke will make $2.23, mostly by having its way with the distributors, as always. You will pay right here for that, give or take a couple of points: price target $43. Nothing like asking a couple of other components in the Dow to do all the heavy lifting, as Coke, the drugs and the telcos just languish again.

DuPont
Has become a wallflower

DuPont ( DD): This company will do better now that raw costs are under control, but nobody will really care. It has become a wallflower-dividend play, with about $3 in earnings power, give or take a dime, and a multiple that seems glued to $15. That's right, I don't see this stock trading far from its $45 anchor. It's a disappointment, despite all of that neat biotech and fuel-efficient stuff in the pipe.

Exxon Mobil
A wasting asset

Exxon Mobil ( XOM): Here's a company that gets so many undeserved accolades that it makes me sick. It hasn't grown its assets -- crude in the ground, my friends -- for years and has played the role of oil bank all too well. I believe it deserves a lower multiple than almost any oil company, even as I believe that the estimates are way too low and this company could earn $6. I am not paying more than $64 for that number, though, because it is, in the end, more of a wasting asset than any other oil company out there, including BP ( BP) and Royal Dutch ( RDS.B). Maybe, just maybe, Lee Raymond will become Maria Bartiromo's permanent co-host this year, and we can bring in someone who actually calls the price of crude right for a change.

General Electric
Too big to see its multiple grow

General Electric ( GE): Biased? Owned? Say what you like because I work with CNBC, whatever; excuse me for saying this, but GE's too cheap. I believe the darned thing can earn north of $2 and deserves to sell at $40 for that plus the dividend giving you a decent return, not great, not bad. The issue here, frankly, is that the company can't escape gravity. We are not going to give the largest company on earth a premium multiple because it is too much like the earth! That's right, the largest company on earth can't advance like a growth stock even if most of its businesses are growing faster than the rest of the economy. It just won't work that way.

General Motors
Abandon all hope

General Motors ( GM): Oops! What happens when this one goes to zero? That's what it is worth, by the way. I believe that if I were running GM, I would just do a prepackaged bankruptcy and let 'er rip. That's right, I would demolish this common stock. Of course, the people who run this company are so clueless they still are paying out a gigantic dividend. I don't know if the keepers of the Dow will keep GM in as it goes down the drain. I also believe that the company will drag this out as long as possible, which is just plain stupid. I see no earnings and no dividend in 2006, which means the stock trades to $10 and really keeps the averages from ramping. I see no hope whatsoever here, even as I hope that I am wrong!

Editor's note: Be sure to read Part 1 and Part 3 and Part 4.

General Electric owns CNBC, for which Cramer is a featured commentator.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, 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 ActionAlertsPLUS. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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