The DivGro Weekly—12.01.24

148 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when we became entitled to our quarterly dividends from Roper Technologies, Mastercard and Intuit. These dividends are all much higher than this time last year, increasing by 9.9%, 15.8% and 15.4% respectively. Next week the DivGro Fund will pay investors its 17th consecutive quarterly distribution, 12.1% higher than this time last year, having increased by at least a double-digit percentage every 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%.

Roper Technologies has increased its dividend every year for the past 31 years, multiplying each original $1 of dividends by a phenomenal 143 times. How so? By implementing the "Roper Way": a system of buying mission-critical niche businesses trending towards domination. These include essential everyday services such as toll road management software and water testing and metering. Under Roper, these businesses are progressively improved until they gain market control. The beauty of this strategy is twofold: the dominant operator benefits from significant profits while the constrained size of the niche deters potential entrants. This establishes Roper's right of way; the company can exploit its chosen niches on its own terms, gradually expanding its share and extracting greater profit margins. Given the breadth of mission-critical niche software applications, Roper is excellently positioned to extend its already formidable dividend growth record.

We discussed the power of rapid and consistent dividend growth in a recent interview on ausbiz. This interview can be viewed here.