Wall Street might be vastly overestimating next year's corporate profits. With this in mind investors can take steps now to determine whether their stock holdings are at risk.

Published analyst forecasts call for profits at companies underlying the S&P 500 index to jump more than 30% next year. That's a recovery and then some. This year, the index's profits are on pace to decline 16.6% after a 5.9% drop in 2007.

Be highly skeptical, for two reasons. The first is that such a profit increase would constitute, not a reversion to the mean, but a return to something far from average. It would put America's corporate profit just atop that recorded in 2006, the year one investment bank called a "golden age of profitability." Company profits that year reached the highest share of the economy since the 1960s. Worker wages hit their lowest share since World War II. Workers, hindsight tells us, spent beyond their paychecks to keep restaurants, clothiers, lenders and computer makers in riches, a feat made possible by bloated house and share prices, and easy loan terms. Share prices have since plunged 40%. House prices have fallen half as hard, but have done more damage to wealth, since America's houses are levered 2-to-1. Credit has got scarce. A return to record profitability, without the conditions that enabled it in the first place, seems unlikely.

Reason No. 2 for doubt: The earnings recovery hinges on S&P's "bottom-up" consensus, which is based on estimates for individual companies. The armies of analysts who track individual companies are far slower to fully adjust their estimates than the few who issue forecasts for entire industries. S&P's "top-down" consensus, which is based on industry forecasts, calls for earnings to fall 2% in 2009.

"This is the time of year when estimates come down the most," says Howard Silverblatt, senior index analyst for S&P. "They've started coming down. We expect more." Silverblatt says investors ought to consider the posted bottom-up numbers "extremely optimistic."

Much is at stake, since profits help investors determine whether stocks are cheap. Over the past 135 years, shares have traded at an average of 15 times trailing company earnings. Bottom-up forecasts put them at less than 9.5 times next year's earnings, suggesting stock prices would be due a big jump next year to return to historic levels. Top-down numbers put stocks at just under 13.5 times 2009 earnings, suggesting merely average performance between now and early 2010. But perhaps neither comparison is fair, since both measures exclude "nonrecurring" charges to earnings, while the market's long-term P/E is based on a measure of earnings that includes all charges. Arguably, the safest forecasts to rely on at the moment are ones that are both top-down and all-inclusive. Those put the index at 17.3 times 2009 earnings, suggesting either a further price decline or a long lull.

Investors can protect themselves by taking a step this column has harped on in recent weeks: focusing on big, safe dividend yields, which do more than low P/Es to lure buyers, and which keep returns rolling in even when the market stagnates. They can also review their stocks to see which might be due for further downward estimate revisions. Two signs to look for: 2009 growth forecasts that seem far out of keeping with the economy; and a big difference between the most optimistic and pessimistic forecasts that make up the analyst consensus (in the language of stock-screening programs, a high standard deviation of estimates). A widely dispersed earnings consensus could signal that analysts are guessing, that companies aren't especially transparent or that some analysts have already reduced estimates, while others haven't. Studies have shown that companies with tightly clustered estimates tend to produce better earnings growth than those with scattered ones. Companies that are the most forthcoming with information, it seems, are the ones with good things to say.

The companies listed below are all expected to produce stellar earnings growth in their next fiscal year, and have earnings estimates that are more scattered than is average for their industries. That's not to say they're sure to miss forecasts. Some of the scattering in Apple (AAPL) consensus, for example, is explained by the timing of its fiscal year; its forecasts are further off, and thus, are expected to be less agreed-upon. But investors holding stocks such as these ought to have supreme confidence that expected earnings growth will occur, or else should be compensated by a big, believable dividend yield. As you can see, not every company on the list offers one of those.