Of the 20 Dow transportation stocks, Landstar System (LSTR) and Ryder System (R) provided the only dividend enhancements. By Miller's tally, the group distributed $18.41, 2.45% above the $17.97 in 2008's third quarter. Yield: 1.97%.

declared a quarterly dividend of $0.045 per share, representing a 13 percent increase in the Company's quarterly dividend. The dividend is payable on August 28, 2009 to stockholders of record at the close of business on August 10, 2009.

Also last week, Dow Jones Transportation components Ryder System (R) and Landstar System (LSTR) raised their quarterly common dividends. Both truckers hail from the Sunshine State, and both have now enriched their payouts for five years in a row. Ryder, citing continuing strong cash flow and solid access to capital, declared a new quarterly of 25 cents a share, up 8.7% from 23 cents, for a 3.69% yield. Dividends have been paid every year without interruption since 1976. The stock trades around 27. From a 52-week high of 75.09 last summer, it tumbled to 19 in March. Standard & Poor's thinks Ryder is a Hold because of the lagging nature of lease cancellations and the ongoing woes of its auto-related clients. Landstar's boost was a half-penny, to 4.5 cents a share. Payouts were initiated in 2005. At the same time, the company posted a 40% drop in second-quarter profit on a 30% decline in revenue but said that, despite the recession, its trailing 12-month return on average shareholders' equity remained high at 35%. Recently at close to 34, the stock yields 0.53%. Its 52-week range is 55.20 to 27.21. S&P rates it a Strong Buy.

Trucking exposure

Four companies among the 20 transportation stocks also delivered dividend enrichments: Burlington Northern (BNI), Landstar System (LSTR), Norfolk Southern (NSC) and Union Pacific (UNP). Burlington Northern and Union Pacific, however, distributed their payouts on the first day of the fourth quarter. And CSX (CSX), FedEx (FDX) and Overseas Shipholding Group (OSG), while paying out more in the third quarter, had all voted their increases in June.

PE of 24 and a PEG of 1.52

At about 53 recently, Landstar, for example, is approaching the consensus Street target of about 55. It is trading at 23.8 times 2008 earnings, versus 13.5 times for the sector. Landstar and J.B. Hunt are trading at 15 times and 11 times their respective book, or accounting, values. Valuations could come under threat if diesel prices continue to climb, and if the economic rebound takes longer than expected to arrive.

Landstar Systems (LSTR) was upgraded from Peer Perform to Outperform, Bear Stearns said. $52 price target. Company is approaching an inflection point for accelerating growth.

buy

Growth