The DivGro Weekly—24.02.23

128 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when Home Depot raised its dividend by 10%, SBA Communications announced a dividend increase of 19.7% and Hermès proposed a dividend increase of 62.5%.

During the week we also collected our quarterly dividends from MarketAxess and Costco, both higher than this time last year.

Since DivGro's inception we have predicted and benefited from 128 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.6%.

SBA Communications, our faster growing wireless infrastructure ('tower') landlord, is privileged in two distinctive ways. Firstly, unlike most other real-estate-oriented models, once a tower is built it costs almost nothing to maintain or upgrade, meaning that any rental uplift translates into nearly pure profit growth. Second, since municipalities mostly refuse to permit extra towers in any location, an incumbent tower is an effective local monopoly. With wireless communication a global 24/7 necessity, mobile carriers (SBA's tenants) have little choice but to accept lengthy, often 15+ year contracts, with generous escalators in SBA's favour. This rare combination of bond-like visibility, progressively rising profitability, and growing demand for wireless data provides an extensive runway for SBA to develop and enhance its rapid dividend growth trajectory.