The DivGro Weekly—31.12.21

88 Consecutive dividend increases

This week we received our quarterly dividends from Domino's Pizza (whose busiest night is New Year's Eve), Stryker and Nike, and became entitled to our quarterly dividend from American Tower.

Since DivGro's inception we have predicted and benefited from 88 consecutive dividend increases, with an average annual increase rate of 14.4%.

Domino's Pizza is dissimilar from many franchise operators which are essentially designed to extract as much as possible from their franchisees. Counterintuitively Domino's is instead built to provide its customers with an outstanding value proposition and its franchisees with the potential for highly profitable independent businesses. This generates both motivated customers and very motivated franchisees, which together lay the foundation for Domino’s own business prospects, benefitting from the surplus value created. Domino's shares its superior margin profile with customers by subsidising delivery, while including franchisees in the profits of its commissary operations. Evidencing Domino’s win-win-win structure is the fact that the average US franchisee makes over $1m in annual pre-tax profits, having typically begun as delivery drivers or pizza makers. Winning together has underwritten Domino's stellar dividend growth record, having increased its dividend every year since 2013 at an annualized rate above 21% per year (or 4.7x in just 8 years).