Jim (cont'd):     

Oh, DuPont has not zoftic yield, sure enough, 6.4%... and while I always adhere to Sir Mix-a-lot's first corollary, I like big yields and I cannot lie... I think DuPont's dividend is the least stable of the three. That's me, okay. I'm sure the company doesn't say that. That's me. I make the judgments. It's my show...

That doesn't mean that I think the DuPont is going to cut its dividend... that's pretty unlikely, given that the expected payout is $1.64, and I think the DuPont has $3.53 in cash flow... but, you know what, in the end, this is about sleeping soundly when we talk yields... and you certainly would sleep more soundly owning a PPG than a DuPont...

See, this is simply the case of wanting to own the best house in a good neighborhood... and not wanting to own the worst house, even if the chemicals neighborhood is pretty good and would get better if we saw turn the economy, like a lot of people think we will.

Why do I think the DuPont is the one to avoid?...

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Because, of all its different segments, agriculture is just about the only business that's doing well. DuPont makes seeds and trades like a mini... it's like a mini Monsanto... and while the agriculture business is doing pretty well... corn seed orders increased 15% year-over-year... and is DuPont's largest end market... 26% of sales, 30% of DuPont's profits... it's also the end market that the company has to count on, because there are a lot of other end markets that aren't working...

DuPont has about 59% of its sales exposed to autos, transports, industrial and other economically sensitive businesses... and that's too much exposure. In total, 22.1% of DuPont's revenues come from... and this is really the reason why I don't want to recommend it... you got it... what's the worst industry in the world... autos! Residential construction... for the moment, two of the most toxic words in English language... are 6.2% of revenues. Commercial construction... another 6%. Holy cow...

Yeah, the company is going to benefit from cheap oil and a weaker dollar, but why not buy PPG?... much less exposed to autos and residential... even as its thought of on the Street as a very dependent on to company...

Given the weakness in its other segments, DuPont's only going to become even more dependent on agriculture for its profits and cash flow. We don't want that. We won't chemical companies that are becoming more -- not less -- diversified.

DuPont also has a pension problem... and this is worrisome...

It's expected to carve $.45-$.58 out of the company's 2009 earnings, at the very least. That is not better than a sharp stick in the retina...

The other important point... this stock is only had a nice run... which really drives a lot of my decision to make in a sell... It announced some really bad news... the company basically threw in the kitchen sink on December 4... it preannounced a very bad 4th quarter, saying it expected between $.20-$.30 of losses per share for the quarter. The Street's estimate was for $.23 of profit per share... When I read this, my head spun...

DuPont also gave 2009 guidance of $2.25 to $2.75, vs. the $2.80 consensus... The company also said volumes were down 15% in the 4th quarter.

And what's happened in the last two weeks since?... The stock went up 8.5%... I mean, talking about bad being good...

In the same period, PPG was up a lowly worm 4.5%. Dow Chemical was up 9.4%... Both these stocks are better buys then DuPont, although it is a good sign when a company dumps a ton of bad news on top of investors, and the stock actually goes up. That's what a lot of the industrial companies have been doing until today. It tells us the sellers are exhausted, they're tired... there's nobody left to sell... and the buyers think the future will be brighter than the past.

But I think that DuPont has had its run. Given that auto exposure... the pension problem... I think DuPont's dividend is the least safe of the three... remember, again, my opinion...

PPG's dividend is lower... it gives the company more wiggle room... plus they raised it in October. That's the sign of confidence that we're looking for from a company.

Remember, I'm trying to extrapolate... this is not just chemicals... You should be thinking about this as... Cramer is giving you the template to analyze any industry, because the accidental yielders have been so great... And, while Dow Chemical's yield is bigger than DuPont's, Dow's size, breadth of business, and the company's consistent reduction of debt... not to mention the huge cost savings that will come now that oil and natural gas prices have cratered... make me more confident in their dividend than DuPont's.

Here's the bottom line...

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The Bottom Line!:     I think DuPont (DD) dividend is the least stable of the bunch... It's stock has had a big run in the short-term over bad news. The company's got much too much exposure to slowing industries worldwide. Alas, poor DuPont... you are the sell in the group.

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