The DivGro Weekly—07.01.22

88 Consecutive dividend increases

This week we became entitled to our dividends from Mastercard, Roper Technologies and Heico.

Since DivGro's inception we have predicted and benefited from 88 consecutive dividend increases at an average annual increase rate of 14.4%.

Heico enjoys a unique and hard to replicate advantaged position in the lucrative market for specialized replacement parts in the aviation and space industries. Heico's competitors design and manufacture the actual aeroplane or spacecraft (typically at a loss), requiring huge upfront R&D costs which can only be recovered by exploiting the resulting ongoing need for replacement parts. Heico however only operates in the replacement parts segment, saving the bulk of R&D costs. Heico shares these savings with customers by pricing its products aggressively at 30%-50% less than competitors - with no reduction in quality - meaning aeroplane and spacecraft owners enjoy significant savings buying from Heico. This structural advantage has underpinned Heico's outstanding dividend growth record which has powered its share price upwards at a compounded average rate of 24% per year since 1990 (or 650x). With a vast and growing replacement parts market, Heico's future dividend prospects look just as compelling.