BOSTON ( TheStreet) -- The Dow Jones Industrial Average has advanced 7.8% so far in 2010, less than half of 2009's 19% increase. The Dow has also trailed the S&P 500 Index and Nasdaq Composite. Some of its components have done even worse. Here are the five worst-performing Dow dividend stocks of 2010. They may continue to underperform the market in 2011. On the other hand, some trade at discounts to comparable investments and may be due for a rebound. Below, they are ordered by 2010 return, from bad to worst.

5. Microsoft ( MSFT) is the world's largest software company, selling the Windows operating system.

Its stock has fallen 15% in 2010, but it has rebounded 8.9% in the past three months. Fiscal first-quarter net income soared 51% to $5.4 billion and earnings per share rocketed 55% to 62 cents, elevated by a smaller float. Revenue grew 25% to $16 billion. The gross margin widened from 83% to 85%. Microsoft has nearly $34 billion of net cash (cash minus debt).

Microsoft's stock trades at a trailing earnings multiple of 11, a forward earnings multiple of 9.4, a sales multiple of 3.3 and a cash flow multiple of 8.3, 69%, 60%, 76% and 53% discounts to software averages.

TheStreet's stock model rates Microsoft "buy" with a target of $29.30, implying 9% upside.

4. Alcoa ( AA) produces and sells aluminum.

Its stock has dropped 16% year-to-date, but has rebounded 28% in the past three months. Third-quarter net income decreased 21% to $61 million. Earnings per share fell a more-modest 14% to 6 cents. Revenue gained 15%. The gross margin improved from 16% to 17% and the operating margin stretched from 2.4% to 4.6%. Alcoa carries $843 million of cash and $9.3 billion of debt, equaling a quick ratio of 0.7 and a debt-to-equity ratio of 0.7.

Its stock sells for a forward earnings multiple of 12, a book value multiple of 1 and a cash flow multiple of 6.5, 26%, 71% and 70% discounts to metal averages.

TheStreet's stock model rates Alcoa "hold", awarding the company a poor volatility score of 2.5 (out of 10) and a weak growth score of 2.6.

3. Hewlett-Packard ( HPQ) sells hardware, including laptops and servers. It has a services division which offers outsourcing and consulting.

Its stock has tumbled 17% in 2010, in part due to CEO Mark Hurd's departure. Fiscal fourth-quarter net income expanded 5.2% to $2.5 billion. Earnings per share grew 11% to $1.10, boosted by a lower share count. Revenue stretched 8.1%. The gross margin widened from 26% to 27%, but the operating margin stagnated at 11%. HP has $11 billion of cash and $22 billion of debt, equal to a 0.6 debt-to-equity ratio.

Hewlett-Packard's stock trades at a forward earnings multiple of 7.3, a book value multiple of 2.4 and a cash flow multiple of 8.1, 52%, 49% and 38% peer discounts.

TheStreet's stock model rates Hewlett-Packard "hold", awarding the company a performance score of 4.6 (out of 10) and a volatility score of 3.5.

2. Cisco ( CSCO) makes networking equipment.

Lower-than-anticipated fiscal 2011 guidance led to a sell-off in Cisco this fall. Its stock has fallen 19% in 2010 and 4.3% in the past three months.

Fiscal first-quarter net income gained 8% to $1.9 billion. Earnings per share rose 13% to 34 cents, boosted by a smaller float. Revenue grew 19% to $11 billion. The operating margin fell from 24% to 22%. Cisco has nearly $24 billion of net cash, equaling a quick ratio of 2.5 and a debt-to-equity ratio of 0.3.

Cisco's stock sells for a forward earnings multiple of 10, a book value multiple of 2.4 and a cash flow multiple of 10, 41%, 23% and 35% industry discounts.

TheStreet's stock model rates Cisco "buy" with a target of $22.13, suggesting 15% upside.

1. Bank of America ( BAC) is a diversified financial-services company, offering retail, commercial and investment banking. Its stock has fallen 27% year-to-date amid foreclosure scrutiny and a tepid economic recovery. It has dropped 16% in three months.

Bank of America's third-quarter loss widened to $7.3 billion, or 77 cents a share, hurt by a goodwill impairment charge in its credit card business due to a new regulatory rule. The company swung to an adjusted profit of $3.1 billion, or 27 cents. Revenue fell 2%. The operating margin rose from 11% to 31%.

Bank of America's stock trades at a forward earnings multiple of 7.4 and a book value multiple of 0.5, 32% and 42% discounts to financial industry averages.

TheStreet's stock model rates Bank of America "sell," awarding it poor scores in all fundamental categories.

-- Written by Jake Lynch in Boston.

To see these stocks in action, visit the 5 Worst Dow Dividend Stocks Portfolio on Stockpickr.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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