BOSTON (TheStreet) -- Some investors have unleashed a backlash in response to sell-side analysts' recently released annual top picks and so-called best ideas for 2011.Although interesting ideas are present in the lists of banks including Goldman Sachs, JPMorgan and Morgan Stanley, critics point out that the best-performing stocks are often found at the bottom of the barrel, receiving the worst ratings from analysts. That rationale makes sense, on some level: When a stock is adored by researchers, there is goodwill and lofty expectations baked into its price, so it's more difficult to outperform. On the other hand, when a stock is universally panned, hurdles are low and even slight improvement can ignite a rally. With this notion in mind, here are the 30th to 11th worst-rated S&P 500 stocks for 2011. 30. Cintas ( CTAS)
29. AK Steel ( AKS)
28. Assurant ( AIZ)
27. Consolidated Edison ( ED)
26. Campbell Soup ( CPB)
25. Paychex ( PAYX)
24. Total System Services ( TSS)
23. FirstEnergy ( FE)
22. AutoNation ( AN)
21. Netflix ( NFLX)
20. National Semiconductor ( NSM)
19. Advanced Micro Devices ( AMD)
18. KeyCorp ( KEY)
17. Vulcan Materials ( VMC)
16. Sunoco ( SUN)
15. Regions Financial ( RF)
14. Hudson City Bancorp ( HCBK)
13. Brown Forman ( BF)
12. Diamond Offshore ( DO)
11. Safeway ( SWY)
Now, here is a closer look at the 10 worst-rated S&P 500 stocks for 2011. 10. Federated Investors ( FII) is an investment-management company. Its revenue has declined 3.9% annually, on average, since 2008. Its stock suffered annualized declines of 15% over that span. In the latest quarter, revenue fell 18% and earnings per share decreased 25%. But, Federated's stock offers a dividend yield of 3.6% and may benefit from continued outperformance of equity markets. It sells for a forward earnings multiple of 15 and a cash flow multiple of 11, 24% and 10% peer discounts. Macquarie offers a target of $30.
8. Eli Lilly ( LLY) is a pharmaceutical company. The company is scheduled to report fourth-quarter results Jan. 27. Third-quarter net income climbed 38% to $1.3 billion, or $1.18 a share, as revenue inched up 1.7%. Like other large-cap drug stocks (Lilly has a $40 billion market cap.), Lilly offers hefty dividends, currently paying 49 cents a quarter and yielding 5.6% a year. Furthermore, the dividend has grown 5.2% a year, on average, over the past five years. The stock is inexpensive, costing 7.9-times forward earnings and 5.8-times cash flow, 34% and 52% peer discounts.
6. Duke Energy ( DUK) is an electric utility. In the past three years, the company has boosted revenue 3.7%, annually, on average. Duke's third-quarter GAAP profit more than sextupled to $670 million, or 51 cents a share, as revenue increased 16%. The operating margin extended from 26% to 28%. Duke doesn't receive a single "buy" rating from analysts covering its stock. Yet, it remains a compelling income investment, yielding 5.5%, but with a payout ratio of more than 100%. The distribution has grown 4.1% a year, on average, since 2008.
4. Masco ( MAS) is a building-products company, selling and installing cabinetry, faucets, paints and decorative products in the U.S. and Europe. Masco swung to a third-quarter loss of $5 million, or two cents a share, from a profit of $28 million, or 14 cents, a year earlier. Revenue declined 6.1%. Masco offers a 2.2% dividend yield, but the payout has fallen from 24 cents in 2009 to eight cents in the latest quarter. No analysts advise purchasing the stock, which is costly, at 31-times forward earnings. A cash flow multiple of 9.2 reflects a 42% discount to the industry average.
2. AIG ( AIG) nearly went bust during the financial crisis and is still 81%-owned by the U.S. government. But the insurer's stock has more than doubled in the past year, benefitting opportunistic investors such as Bruce Berkowitz of Fairholme Capital. Of note: Fairholme added more than 11 million shares to its position in the fourth quarter, signaling optimism. AIG's third-quarter income from continuing operations was stable at $2.1 billion. Its adjusted loss of $1.47 a share beat analysts' consensus estimate by 58%, indicating a faster-than-expected business turnaround.