It was a great week for utilities last week, especially during a down market week for the Dow Jones Industrial Average. With this in mind, it's interesting to note that a third of the stocks that increased their dividends last week were utility stocks.

As Jim Cramer said, dividends "hold the key to the deceleration of the bear."

Stockpickr has reviewed the companies that had dividend declarations last week and put together a list of the top dividend-increasers for the week.

An example is AT&T (T), which boosted its quarterly dividend by 2.5% to 41 cents a share. This was the 25th straight year that the company has raised its dividend to its shareholders. In addition, it has been reducing its number of jobs, along with cutting costs.

AT&T has a very good price-to-earnings, or P/E, ratio of 12, better than Verizon's (VZ) P/E of 15. Its PEG ratio is a favorable 1.51, much lower, and therefore much better, than Verizon's and the industry average. AT&T also has a great yield of 5.7%.

The stock is owned by Citadel Investment Group, one of the world's largest hedge funds with $20 billion under management. This Chicago-based fund was founded by billionaire trader Kenneth C. Griffin. It had an average return of approximately 25% from its inception through 2006. Citadel also has investments in JPMorgan Chase (JPM), with a yield of 4.5%; Scripps Networks Interactive (SNI), with a 1.3% yield; and Pepsi Bottling Group (PBG), with a 3.7% yield. Last month, PBG that it is eliminating 3000 jobs.

Another dividend-increaser is DPL (DPL), operator of the regional electric utility Dayton Power and Light Company. DPL is rated buy by TheStreet.com Ratings. It just bumped up its quarterly dividend by 3.64% to 28.5 cents per share. The stock has a decent P/E of 11 compared with most other utilities, which average 13. Its PEG ratio is an excellent 0.97, vs. the industry average of 1.88. It pays a yield of 5.4%.

DPL showed up a couple months ago in one of Stockpickr's Short-Squeeze NYSE Plays portfolios, because it had a short ratio of 35.2. Its short ratio is still high at 12.3. Other stocks listed in the portfolio include HNI (HNI), with a yield of 5.7%, and Polaris Industries (PII), which has a yield of 5.6% and which, according to Cramer, is a very well-run company.

Another dividend-raiser is Edison International (EIX), which bumped up its quarterly dividend from 30.5 cents a share to 31 cents a share. It has been considered a best-of-breed merchant generator. The stock has a P/E of 9, a PEG ratio of 1.08 and a yield of 3.9%.

For more ideas, check out the top dividend increasers for the week portfolio at Stockpickr.com.

Posted on Dec. 15, 2008