By Suzanne McGee, The Fiscal Times

It looks increasingly as if 2011 will go down as the year of two stock indexes.

As of Wednesday's market close, the S&P 500 had wiped out the last of its remaining gains and again had fallen into the red for 2011. Still, despite a similar retreat in Dow Jones Industrial Average, it remains 5% higher for the year.

The reason for the discrepancy? Well, investors and other pundits have been talking all year about the joys of dividend income and their willingness to pay up to own companies that have healthy balance sheets and pay out some of their excess cash to shareholders.

That list includes many blue-chip stocks that play a greater role in shaping the direction of the Dow than the much broader market-cap-weighted S&P 500. Known as the "dogs of the Dow," the highest-yielding stocks continue to lead the index into the final trading sessions of 2011.

McDonald's (MCD): Up 33%
The fast-food chain has followed up its 27% gain in 2010 with an even better year, leading all blue-chip stocks. Investors may not want to bite into Big Macs, but the combination of a trailing P/E ratio of around 20 and a 2.8% yield has been irresistible. McDonald’s is also a classic defensive stock: If the economy stalls again because of Europe’s ongoing woes, it’s easy to imagine that a number of families who once grilled steaks at home might opt for burgers and fries instead.

Pfizer (PFE): Up 28%
There are all kinds of shadows hanging over the pharmaceutical industry, from questions about patents and new drug pipelines to what might lie ahead when additional provisions of the Affordable Care Act get rolled out. But Pfizer offers a 4.1% yield (it boosted its dividend again this year) and has some possible blockbusters in the offing, cushioning the blow of losing Lipitor's patent protection.

IBM (IBM): Up 27%
One of the most venerable technology companies out there has been making a big push into one of the most buzzed-about parts of the technology universe this year, snapping up one company after another with expertise in the cutting-edge world of cloud computing software.

The three real "dogs" of the Dow -- those whose performance really stank -- are a similarly motley crew:

Bank of America (BAC): Down 60%
Investors don’t find much to like about this megabank, which briefly dipped below $5 a share in the final weeks of the year. Regulators peer over its shoulders, it’s struggling to turn a profit in a difficult market, and it’s collecting bad press for hiring debt collectors who harass little old ladies. (One blogger dubbed it a poorly managed, oversized nightmare bank, "the most-hated name in the most-hated sector with the most opaque balance sheet.") Oh, yeah, and even at these low levels, its dividend yield is less than 1%.

Alcoa (AA): Down 44%
This plunge is all about aluminum prices, which tanked this year amid widespread economic pessimism. If people don’t buy new cars or homes, and if airlines (like bankrupt American Airlines) don’t place orders for new planes, aluminum sales nosedive. A simple story. And while some contrarians are betting on a turnaround, it didn’t come in time to extract Alcoa from this year’s Dow Hall of Infamy.

Hewlett-Packard (HP): Down 39%
It remains to be seen whether CEO Meg Whitman can save the company from following the dinosaurs into oblivion, a rescue that will require a new strategy from the new chief executive -- either that or for consumers to re-embrace the personal computer at the expense of tablets. At least the company is saving a bundle on executive salary by paying Whitman just $1 a year.

The common elements among the winners are stability and solid cash flow that supports a reasonable, if not lavish, dividend.

The losers? Battered either by outside forces or internal mismanagement (or a combination of both), they aren’t able to offer investors a credible picture of stability in a volatile market and economic environment. It’s hard to imagine that in a year the characteristics of both winners and losers will have changed much. That’s something to bear in mind as you prepare your portfolio for a turbulent new year.

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