Headquartered in Federal Way, Wash., 109-year-old Weyerhaeuser (WY) chopped its quarterly common payout 80%, from 25 cents to a nickel a share -- and that follows a decrease in December from 60 cents. The combined cuts will save the company some $465 million annually. Weyerhaeuser has been paying dividends without interruption since 1933. Yield: 0.73%. "We are taking many actions, including deferring timber harvest, shutting and curtailing facilities, and reducing costs wherever possible to preserve our long-term value and improve our performance," declared Chief Executive Daniel S. Fulton. The dividend cut "enhances our current liquidity and provides for more financial flexibility, including a possible REIT [real-estate investment trust] conversion, should the board make that decision in the future." Actually, Weyerhaeuser's REIT-conversion notion isn't new: Many investors and analysts have been suggesting for years that this would make the company's timberland business more tax-efficient. Weyerhaeuser pays a 35% tax on income, but rivals structured as REITs pay no income tax. Their investors pay only the 15% long-term capital-gains tax on dividends. But a REIT conversion would require a large payout to shareholders, since REITs must distribute at least 90% of their taxable profits in dividends. Standard & Poor's expects Weyerhaeuser to have cash in excess of $1 billion at the end of this year. The stock changes hands on the Big Board at around 28. Its 52-week range is 65.50 to 18.67.

Another venerable company making a hefty payout reduction last week was Paccar (PCAR). One of the world's largest big-rig truck manufacturers, Paccar on Tuesday sliced its quarterly in half, to nine cents a share, for an annual savings of roughly $130 million. The 104-year-old Bellevue, Wash., company, whose premium global truck brands include Peterbilt, Kenworth and DAF, was quick to point out that it has earned a net profit for 70 consecutive years and has paid a dividend every year since 1941. CEO Mark Pigott called the payout cut "a prudent business measure in response to the global challenges affecting all industries." He added that the reduction will "enhance Paccar's strong balance sheet and liquidity" and allow it to invest in such projects as new truck models, factory productivity and aftermarket distribution centers. Pigott noted that Paccar has increased its quarterly by 200% since 1998. It had been in the habit, too, of paying a bonus dividend every year since the mid-1990s, although last year's was only 10% of 2007's $1 a share. JPMorgan Securities thinks Paccar will continue to keep $2 billion to $2.5 billion of manufacturing cash on its balance sheet, as it has since 2005. The firm believes "the trough of the U.S. economic cycle is upon us...though a recovery in truck orders will likely lag a recovery in industrial production and freight demand by about two quarters."

Last week was not entirely cheerless. Walgreen (WAG), the largest U.S. drugstore chain by revenue, boosted its quarterly common payout 22.2%, to 13.75 cents a share from 11.25 cents, for a 1.91% yield. The enhancement will put $99.2 million more in investors' pockets. Deerfield, Ill.-based Walgreen, which was founded in 1901, has paid dividends since 1933, and now has sweetened them for 34 years in a row. Disbursements have risen by an average compound annual rate of more than 21% over the last five years. CEO Gregory D. Wasson said the dividend boost "reiterates our confidence in our key growth strategies and our ability to generate strong free cash flow." He also said Walgreen is "well-positioned to emerge from the current recession even stronger than we entered it." The Big Board-listed stock trades around 29, and has a 52-week range of 37.85 to 21.28.