The DivGro Weekly—13.12.24
175 Consecutive dividend increases
Weekly Dividend Progress
This week we received further real-time, tangible evidence of outstanding business progress when Zoetis raised its dividend by 16% and Stryker by 5%. We also collected our quarterly dividend from Wingstop and became entitled to our quarterly dividends from Alphabet and Pepsico, all meaningfully higher than this time last year.
How We Are Tracking
Since DivGro's inception we have predicted and benefited from 175 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.60%.
Pepsico
Today, Pepsico is a household name: its products are sold in more than 200 countries and it boasts a stellar dividend growth record stretching 52 consecutive years, driving a sensational stock price outperformance over the same time. But it was not always so. Although its original formula dates back to 1898, when it was invented by pharmacist Caleb Bradham, the business itself underwent several reorganisations before listing in 1941. For many years, Pepsi positioned itself as a value brand relative to Coke, which helped to gain share in the US supermarket channel. Fast-forward to 2023 — following 125 years of the Cola Wars — when it matched Coke’s share of the US liquid refreshment beverage category, with each assuming approximately 20 per cent share. Interestingly, Pepsi has never seriously attempted to dislodge Coke internationally but has, rather astutely, channeled resources towards building dominance in its snack business, acquired in 1965 via a merger with Frito-Lay. That proved a winning strategy: today 60 per cent of Pepsico’s annual sales of $90 billion are thanks to food — including heavyweight brands like Dorito’s, Lays and Tostitos, while the company is also developing its leadership in emerging categories like hummus with Sabra and Obela. Given these enjoy much faster and more expansive growth characteristics than the original cola business, Pepsico is on course to extend its dividend growth trajectory long into the future.