The DivGro Weekly—21.01.22

88 Consecutive dividend increases

This week we received our quarterly dividend from Heico, and became entitled to our dividends from Zoetis and Lowe's.

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

This week DivGro paid investors its 9th consecutive quarterly distribution.

Lowe's went public in 1961 and has increased its dividend every year since at an astonishing compounded average rate above 16% per year (leading to a greater than 7000x uplift in share price). This may appear odd, given Lowe's sells into the seemingly boring home improvement market. But below the surface, Lowe's together with Home Depot (another DivGro holding) occupy a seemingly impregnable stranglehold, commanding above 30% of the U.S. market against a long tail of relatively miniscule competitors. These scale advantages create meaningful cost leadership which Lowe's (and Home Depot) choose to translate into unmatchable prices. Since existing homes need constant maintenance, together with an annual addition of newly constructed homes, there is a long, strong growth runway ahead. When this growth runway is coupled with unmatchable prices in a vast and fragmented market the prospects for continued sparkling results are compelling.