The DivGro Weekly—05.01.24

148 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividends from Nike and ADP and became entitled to our quarterly dividend from FirstService, all much higher than this time last year.

Since DivGro's inception we have predicted and benefited from 148 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15%.

Originally a local swimming pool management company, today FirstService occupies the prized position in essential property management services in North America. This privileged stature has underpinned FirstService's substantial dividend growth record, having increased around 11% per annum compounded since initiating quarterly dividends, while simultaneously reinvesting the bulk of its earnings at even higher internal rates of return. Its significant size advantage allows rapid acquisitive growth - such as the recent acquisition of Roofing Corp of America, one of the biggest commercial roofing enterprises in the continent - expanding breadth of service and footprint while encumbering fragmented competitors from gaining significant share and thus reinforcing FirstService's leadership. This scale advantage sees FirstService better able to control and differentiate service cost and quality which coupled with an unending horizon of housing units yet to benefit from advantageous professional management, ideally positions the company for enhanced market leadership and continued growth of its already impressive dividend trajectory.

We discussed FirstService in a recent interview on ausbiz. We covered some of what makes it so special, and why it has such a long and promising runway ahead. Click here to access the interview.