As the overall market has descended steadily during the past 18 months, dividend payouts have been a common way to choose among stocks. The emerging difficulty with the approach, to quote an Indiana-raised friend of mine with a penchant for puns, is that, amid today's sloppy economic circumstances, what's here today may be gone to Muncie.

Take Weyerhaeuser (NYSE:WY), for instance. The wood products company announced Friday that it would chop its quarterly dividend by more than half, from $0.60 to $0.25 per share. That'll take its formerly impressive 6% dividend yield to the woodshed as well.

The company also said it will freeze the wages of its salaried employees and executives. At the same time, its expected capex for 2009 is now pegged to slide to a range of $200 million to $250 million, from about $425 million this year.

As Weyerhaeuser noted in announcing the changes, the primary culprits in its newfound plight revolve primarily around softness in the housing and pulp markets. With homebuilders like D.R. Horton (NYSE:DHI) and Centex (NYSE:CTX) struggling, along with newspaper publishers like McClatchy (NYSE:MNI) and Gannett (NYSE:GCI), demand for Weyerhaeuser's core products has fallen sharply. Put simply, when you depend on business from industries that are weak, you're going to see your revenues slide.

Friday's announcement continues a string of bad news. In August, the company said that it would furlough 6.3% from its total workforce. Beyond that, earlier in the year it sold its containerboard, packaging, and recycling businesses to International Paper (NYSE:IP). The resulting $6 billion payment was used primarily for debt reduction.

As an erstwhile housing and building materials analysts, I've long watched Weyerhaeuser attempt to serve several industries for which "cyclicality" is virtually a middle name. Indeed, I'm also among those who, for reasons of tax efficiency, would like to see Weyerhaeuser convert from a corporate form to a real-estate investment trust (REIT) structure.

Nevertheless, in view of Friday's pullbacks and consensus expectations that the company will check in with expanding losses both this year and next, I'd advise Foolish investors to keep the company at arm's length for now.

Weyerhaeuser has been adorned by a pair of stars -- of a possible five -- by Motley Fool CAPS players. Does this rating include your vote?

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Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned above. He does, however, encourage your comments, questions, or kibitzing. International Paper is a Motley Fool Income Investor pick. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.