5 Blue Chips Raising Dividends This Week

Now that earnings season is in full swing, many companies are  pairing third-quarter EPS and sales numbers with headlines about stock buybacks and dividend increases. A few big-name blue chips have increased their dividends this week, including a few high dividend yield companies in the utility and energy sectors. Some are dividend mainstays, like the REIT and timber powerhouse Rayonier (NYSE: RYN ). Others, like coal giant Peabody Energy (NYSE: BTU ), have meager yields but are paying back shareholders due to breakout profits. In both cases, the dividend increases are worth noting. Here's this week's list of big-name blue-chip stocks raising dividend yields: Rayonier Dividend Increase On Monday, timber giant Rayonier (NYSE: RYN ) said it would boost its regular quarterly cash dividend by 8%, to 54 cents from 48 cents previously. The Rayonier dividend is payable Dec. 31 to shareholders of record as of Dec. 10. The latest increase to the RYN dividend gives this wood and logging blue chip a yield of about 4.2% at current valuations. Rayonier has been paying dividends since 1939, and this recent boost is the company’s fifth dividend increase since its converting to a real estate investment trust or REIT structure in 2003. As a REIT, Rayonier now has to distribute 90% of its income to shareholders — meaning plump, regular payouts for RYN stock owners. What does logging have to do with real estate, you ask? Well, Rayonier owns, leases or manages 2.5 million acres of timber and land in the United States and New Zealand as well as approximately 200,000 acres with residential and commercial development potential. Shares of RYN stock are up 21% so far in 2010 thanks to strong pulp and wood production at Rayonier, and up against a 52-week high of $51.58. Peabody Dividend Increase Coal stock Peabody Energy (NYSE: BTU ) has been heating up lately, jumping 20% since Sept. 1. The buying pressure has come from hopes for increasing demand and the positioning of coal as cheap energy in emerging markets like China. Peabody stockholders another reason to smile this week. It will increase its quarterly dividend by an impressive 21%, to 8.5 cents per share from 7 cents a share. The news came alongside a strong earnings report;  Peabody’s profit doubled year-over-year in the third quarter. The new dividend yield for Peabody is still pretty meager at just 0.7%, but a nice perk for BTU owners. It's also worth noting that Peabody raised its dividend a year ago by 17%, so these aggressive increases may mean BTU is trying to position itself as a decent dividend stock over the coming years. The next Peabody dividend is payable on Nov. 26 to stockholders of record Nov. 4 Visa Dividend Increase Visa (NYSE: V ) announced a hefty 20% increase in its quarterly dividend, from 12.5 cents a share to 15 cents a share. Of course, the overall yield remains pretty meager at less than 0.8%, but Visa hasn't been around for very long (Visa’s initial public offering was in March 2008). The dividend is payable Dec. 7 to stockholders of record Nov. 19. Like Peabody, Visa may be trying to position itself as a dividend stock over the long term with big increases like this, though it likely wants to be cautious and avoid shareholder wrath by not slashing the payouts. Whatever the future holds for Visa, the present is iffy. The stock is down almost 10% year-to-date, though its most recent earnings report show payments are starting to turn around as consumers swipe credit and debit cards more often. Freeport McMoRan Dividend Increase With all the fuss about gold prices and gold miners, it's no surprise that metals giant Freeport McMoRan (NYSE: FCX ) has some cash to spread around via a dividend increase. After FCX reported blowout earnings of $2.49 per share — topping forecasts of $2.19 by 13% — it also hiked its quarterly payday significantly. However, investors should take note that Freeport's copper business had as much to do with those gains as fervor over gold. Here are the specifics: FCX boosted its quarterly dividend a whopping 66%, from 30 cents a share to 50 cents. The result is that Freeport McMoRan now yields about 2.2% at current valuations. The dividend is expected to be paid in February 2011. Freeport is on fire lately, up 56% since July 1, and could be a strong play for the recovery if copper prices continue to creep up and demand remains strong. American Electric Power Dividend Increase American Electric Power (NYSE: AEP ) was charged up this week thanks to a strong third-quarter earnings report. AEP Q3 profits increased by 25%, thanks to stronger industrial activity.  Shares are up almost 3% since late last week. In other good news for AEP investors, American Electric Power announced a 9.5% increase in its quarterly dividend, to 46 cents a share from 42 cents a share. That puts the new dividend yield of AEP stock at nearly 5%. Utility stocks are in favor among dividend investors right now because of high yield and regular payouts. AEP definitely fits that description, considering it has paid out stipends quarterly for over a century. Jeff Reeves is editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks named here. Follow Jeff on Twitter at http://twitter.com/JeffReevesIP.
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