40 Blue Chips Increasing Dividends in Q2

What’s more addictive than smoking? Tobacco dividends. And Reynolds American (NYSE:RAI) has been delivering smooth, unfiltered cash for years. This year, RAI needed its dividend boost just to keep up its phenomenal 5%-plus yield amid a 10% surge in its share price.

No one’s talking up a yield that’s solely right of the decimal point, but Southwest Airlines (NYSE:LUV) at least gets the nod for being the only big airline currently doling out a check of any sort. And after roughly a decade of using a knife to split pennies for its dividend, Southwest upped the ante with a 122% increase that brought its payout to a full cent per share. Don’t fork over the down payment on the yacht quite yet, but you can afford a little more confidence if you’re long LUV.

The past few months have thoroughly tarnished a number of luxury stocks, but a couple bright spots came in the form of dividend hikes. Coach (NYSE:COH) boosted its dividend by 33%, and Tiffany & Co. (NYSE:TIF) bumped up its payout by 10%. Both yield more than 2% as of July 2, but both of those yields have been helped out by roughly 25% tumbles in company shares.

Walgreen‘s (NYSE:WAG) 22% dividend increase has helped boost its yield to 3.68%. Of course, that’s a partial truth. Also helping is a steady 30% decline in share price over the past 52 weeks. WAG is struggling for a number of reasons — the loss of its Express Scripts deal, margin and revenue pressures, a poorly timed deal for a European pharmacy and beauty chain — so the drugstore’s headline yield might make WAG a wolf in sheep’s clothing.

Kyle Woodley is the assistant editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley.