The DivGro Weekly—02.08.24

166 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when Wingstop raised its dividend by 22.73%. We also collected our quarterly dividend from Watsco and became entitled to our quarterly dividends from Costco and Texas Instruments, all meaningfully higher than this time last year.

How We Are Tracking

Since DivGro's inception we have predicted and benefited from 166 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.83%.

Investor Letter

On the eve of DivGro’s fifth anniversary, we have published our July 2024 investor letter, which can be accessed here.

Wingstop

Wingstop, our dynamic chicken wing franchisor, just announced a 22.73 per cent dividend increase — thereby extending its superlative dividend growth trajectory, in excess of 20 per cent per annum compounded (plus significant special dividends), since initiating dividends in 2017. Recently, Wingstop crossed the 2000 store mark in the US. This critical inflection point provides Wingstop with significant scale benefits — recently discussed in our feature on ausbiz, accessible here — in particular access to national advertising, including lucrative affiliations with the NBA and NFL. Naturally, this has supercharged demand; already Wingstop has exceeded its initial aspirations of reaching average annual sales per unit of $2m, now focused on the possibility of $3m as its North Star. This upsurge in sales per store — achieved with no meaningful cost increase — has propelled profitability, intensifying demand from prospective franchisees for new franchises. This, too, is unsurprising given franchisee economics from owning a Wingstop exceed 50 per cent per annum. Wingstop now envisages up to 6000 units in the US — underscored by both accelerated customer and franchisee demand — which should offer a foretaste of the company’s extensive runway and continuous development of its dividend growth record.