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Top Dividend Stocks of the Week: Safeway

Here are some of the latest stocks to raise their dividends.
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Companies that raised their dividends last week were all across the board. They represented a wide range of industries, including jewelry, natural gas, insurance and telecommunications.

Stockpickr has reviewed these companies and compiled a list of the Top Dividend-Raisers for the Week.

One of the stocks with the greatest dividend increase is El Paso (EP), the natural gas distributor, which raised its quarterly dividend by 25% to 20 cents a share. The company just approved a $300 million share repurchase program because of increasing cash flow. The stock has a P/E of 13 and a PEG of 1.37, and it pays a yield of 0.8%.

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El Paso is owned by one of the largest hedge funds in the world, Citadel Investment Group, which was founded by noted billionaire trader Kenneth C. Griffin. This Chicago-based fund has $20 billion under management and has had an average annual return of 26% from inception through 2006. Citadel also owns Union Pacific (UNP), with a yield of 1.2%; News Corp. (NWS.A), with a yield of 0.6%; and Boeing (BA), with a 1.9% yield.

Another dividend-raiser is the large North American supermarket chain Safeway (SWY), which bumped up its quarterly dividend by 20% to 8.28 cents per share. The company recently reported that, after already repurchasing about $3.55 billion of Safeway stock, it had increased the company's stock repurchase program by $1 billion to a total of $5 billion. However, Morgan Stanley just downgraded the stock to equal-weight from overweight. The stock has a P/E of 15 and a PEG of 1.31, and it pays a yield of 1%.

Safeway is held in the portfolio of the Columbia Acorn Select Fund, a five-star Morningstar-rated fund managed by Charles P. McQuaid. The fund has had an average annual return of 19.3% over the last five years. Columbia also has in its portfolio Janus Capital Group (JNS), with a 0.1% yield;, Potash (POT), with a 0.2% yield; and Abercrombie & Fitch (ANF), with a 0.9% yield.

Assurant (AIZ), the specialized insurance company, increased its quarterly dividend by 17% to 14 cents per share. The stock was recently downgraded by Goldman Sachs to neutral from buy because of increased exposure to catastrophe risks with hurricane season approaching. The stock has a P/E of 12 and a PEG of 0.91, and it pays a yield of 0.7%.

Assurant is part of The Claymore/Sabrient Insider ETF, which holds stocks reflecting favorable corporate insider-buying trends.

For a complete list of the Top Dividend-Raisers for the Week, go to Stockpickr.com.


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