The DivGro Weekly—19.01.24

148 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividend from Intuit and our special dividend from Costco. We also became entitled to our quarterly dividends from Watsco, Zoetis and Abbott Labs.

Today the DivGro Fund paid 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%.

Watsco, our impregnable HVAC distribution leader, has grown its dividend from 10 cents per share in 2000 to $9.80 per share today. This impressive multiplier foretells Watsco's privileged position. How? The competitive environment is highly fragmented while Watsco's market share outsizes the combined share of its primary rivals. This facilitates Watsco's upper hand with suppliers: its size ensures it is the beneficiary of sharper prices, better payment terms and first-dibs access to new products. Plus, with an installed base of more than 110 million air conditioning units across North America, Watsco enjoys an endless horizon of ongoing repair and replacement. This engenders a fantastic economic simultaneity: as products eventually wear and technology becomes increasingly sophisticated, the knowledge gap for consumers to implement necessary repair themselves deepens, while Watsco's position becomes ever more entrenched, fortifying the company's future and its continued ability to build upon its remarkable dividend record.

We covered Watsco in a recent interview on ausbiz, discussing some of the key factors which have powered its phenomenal dividend growth record and why we think this is set to continue. This interview can be viewed here.