The DivGro Weekly—09.12.23

114 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when Mastercard raised its dividend by 16.3% and Stryker by 7.9%.

Since DivGro's inception we have predicted and benefited from 114 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.3%.

We also collected our quarterly dividends from Microsoft and Wingstop, and became entitled to our dividend from Nike.

While many industry leaders redeploy the benefit of their cost advantages into lowering prices to stifle competition, Nike takes a more distinctive approach. Since Nike's customers are not particularly price sensitive (but are rather swayed by image and association), Nike opts to reinvest its significant cost advantages into squeezing the choke point relevant to selling athletic shoes and apparel - the finite supply of elite and influential athletes and teams. Importantly, whereas most conventional advertising is fragmented and can easily be raised or reduced on demand, in Nike's case the advertising dynamic is much closer to an all or nothing scenario, especially since no two athletes or teams command equal influence or attention. By aggressively outinvesting competitors in this area, Nike locks up its preferred supply of the most desirable teams and athletes, often for entire careers. This unusual approach uniquely enables Nike to sell both more of its wares and at higher prices, underpinning its compelling 21-year record of raising its dividend every year at an average rate above 15% per year.