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Two legs of Rayonier’s (RYN) business are taking a beating in the current collapse of the housing business but the third is delivering surprising growth. In the first quarter of 2009 timber sales were down by 27% from the first quarter of 2008 and real estate sales were down 10%. But the company’s high performance fiber business—things like the cellulose, which goes into cigarette filters—showed sales growth of 17% and Rayonier succeeded in passing along higher costs to its customers. At its July 2 price, the stock paid a dividend yield of 5.5%.  As of July 2 I’m raising my target price to $39 a share by December 2009. (Full disclosure: I own shares of Rayonier in my personal portfolio.)