The DivGro Weekly—01.12.23

143 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividends from Poolcorp and MSCI and became entitled to our quarterly dividends from S&P Global and Home Depot, all higher than this time last year.

Since DivGro's inception we have predicted and benefited from 143 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.1%.

MSCI, the company behind the famed MSCI World Index, was spun out of Morgan Stanley in 2007. It has already forged a formidable dividend record, having grown its dividend nearly 8x since its maiden 2014 dividend. While it benefits from its position as dominant compiler of indices outside the USA, simultaneously, it earns ongoing royalty-type payments from asset management offerings which seek to replicate its indices. Each of them faces a conundrum that consolidates MSCI’s advantage: the longer these offerings exist, the more entrenched MSCI becomes, given cloners are disincentivised from undermining their own track records as they grow with time. Instead of resting on its laurels, MSCI has capitalised on the emergence of ESG and climate demands on businesses to leverage its reputation to become the dominant decision support tool in these growth areas. A single substantial client win (e.g. McDonald's) often forces the entire sector (fast food) to follow suit. This business line is already nearing 15 per cent of MSCI’s total sales and with a huge runway and supercharged growth, it provides outstanding potential for MSCI to perpetuate its rapid dividend growth trajectory for the foreseeable future.

This week we were interviewed again on ausbiz, this time about our animal healthcare juggernaut Zoetis. We discussed how it has grown its dividend by more than 500% since its 2013 IPO and why it is poised to keep growing its dividend handsomely into the future. Click here to access the interview.