The Skinny on Possible Dividend Boosts

I believe Tootsie Roll (TR Quote) will raise its dividend for the 41st consecutive year in late May. The candy maker currently pays out 7 cents a share each quarter, and recent history suggests the payment will be raised to only 7.5 or 8 cents. Either way, the 1% yield would represent only 23% of expected full-year earnings, and I believe readers would be better served in this sector by Hershey Foods' (HSY Quote) 1.5% dividend or Wm. Wrigley Jr.'s (WWY Quote) 1.6% payment.

W.W. Grainger (GWW Quote) has boosted its quarterly dividend 32 consecutive years and will likely raise the payout again in late April. The industrial equipment distributor's 20-cent payment (1.3% yield) is just 23% of expected 2005 earnings, and I'd like to see management deliver a sizable increase to 25 cents or 30 cents a share, which is more representative of the company's consistent cash flow and lengthy dividend history.