The DivGro Weekly—14.02.25
182 Consecutive dividend increases
Weekly Dividend Progress
This week we received further real-time, tangible evidence of outstanding business progress when L’Oréal increased its dividend by 6.06%. We also received our quarterly dividends from Mastercard and Texas Instruments and became entitled to our quarterly dividends from Costco and Visa, all meaningfully higher than this time last year.
How We Are Tracking
Since DivGro's inception we have predicted and benefited from 182 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.37%.
Investor Letter
Earlier this week, we sent out our February 2025 Investor Letter. In it, we cover the success of our dividend growth strategy to date, notably coinciding with the recent milestone of 180 sequential dividend increases. The letter can be accessed here.
L’Oréal
Anyone who has ever used make-up knows looks can be deceiving. Therefore, it comes as no surprise that although headline analyses suggest L’Oréal had an average year in 2024, a truer picture of its excellent performance lies below the surface. Born in Paris in 1909, the beauty giant dominates its industry at 115-years-young, having cultivated its market leadership over more than a century. In its so-called ‘average’ year, L’Oréal significantly outpaced its peers. While collectively the growth of these peers was effectively nonexistent, L’Oréal on the other hand once again meaningfully outpaced its industry. The company grew sales above 5% to 43 billion euros, stretching its lofty gross margins further to nearly 75%. Notably, such mouthwatering margins usually tend to be squeezed by aspirant competitors over time — especially over an extended period such as 115 years. That is, unless one’s products are hard to replicate and so beloved by consumers such that they are prepared to pay more. L’Oréal has proven its ability to not only continuously take share under all conditions and across all geographies, but also to enjoy durable ultra-high margins, reinforcing its track record as a profit machine. That it has more than a century of dominance behind it reinforces L’Oréal’s growth potential as it continues to build its lead, which undoubtedly bodes well for its future dividend growth credentials.