The DivGro Weekly—18.02.22

92 Consecutive dividend increases

This week we benefited from two more dividend increases when Moody's raised its dividend by 12.9% and Watsco by 12.8%.

Since DivGro's inception we have predicted and benefited from 92 consecutive dividend increases at an average annual increase rate of 15.3%.

We also received our dividend from Abbott Labs and became entitled to our dividends from Cintas, Starbucks, S&P Global and Visa.

Moody's, together with S&P Global (another DivGro holding) operates an effective toll over bond issuance. Moody's fees are small compared to the cost and interest savings derived from retaining its bond credit ratings. Many large issuers will enlist both Moody's and S&P Global simultaneously, meaning neither is required to compete on price. Unusually, this shared market dominance is further entrenched by regulators which in most countries issue very few ratings licenses, stifling competition. Moody's core asset is its reputation accumulated over 100 years, having rated more than $72 trillion cumulatively. This reputational advantage, coupled with unique pricing power, enables Moody's to convert more than 50c of every $1 of sales into net profit. Blending longevity, profitability and friendly regulation, together with an expansive runway for global bond issuance and adjacent data services, Moody's is extremely well positioned to extend its enviable dividend record, having raised its dividend by 6.2x since 2010.