The DivGro Weekly—21.02.25

184 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when Hermès and Watsco both announced substantial dividend increases. We also received our quarterly dividend from Abbott and became entitled to our quarterly dividends from Cintas and MSCI, all meaningfully higher than this time last year.

How We Are Tracking

Since DivGro's inception we have predicted and benefited from 184 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.68%.

Hermès

We covered Hermès in our latest interview on ausbiz, which can be accessed here. Take a cursory scroll on TikTok and you will find legions of Hermès whisperers trading success stories of finding their sac du jour; one devotee just flew to Paris on an eight-day sojourn to secure a leather appointment. She is one of many ultra highfliers who go to great lengths to share in the rarefied air of the hallowed house of Hermès, the 187-year-old luxury maison whose legacy continues to strengthen. On the eve of a spectacularly successful year, the blue-chip house recently boosted its dividend. In 2024, Hermès lifted its sales by 15 per cent to more than 15 billion euros, boosting profits and cash flow into record territory — all against a lacklustre backdrop of a struggling luxury sector. How so? Hermès is in a league of its own; it caters to the uber-affluent demographic whose composition may change but nevertheless reigns atop the wealth pyramid. For this deep-pocketed group, Hermès bags and shoes are often deemed must-have necessities rather than discretionary accoutrements — each a stepping stone towards an elusive Birkin or Kelly bag. As customers develop purchase records, which entitle to them to better and rarer goods, particular patterns of customer behaviour become entrenched, explaining the house’s ability to lift prices without disrupting demand, while others contrastingly often see unit sales fall even as they lower prices. This progressive customer loyalty solidifies an installed base of repeat Hermès customers. With every potential leather appointment becoming increasingly sought after, the company’s enduring heritage — and enduring allure to aspirant customers — is reinforced, culminating in a visibly profitable runway concomitant with a likely extension of the company’s impressive dividend growth record.