The DivGro Weekly—17.01.25
177 Consecutive dividend increases
Weekly Dividend Progress
This week we received further real-time, tangible evidence of outstanding business progress when we became entitled to our quarterly dividends from Intuit, Mastercard and Abbott, all meaningfully higher than this time last year.
How We Are Tracking
Since DivGro's inception we have predicted and benefited from 177 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.56%.
Distribution
Next week, we will pay our 21st consecutive quarterly distribution. Notably, this distribution is 11.2% higher than the same time last year. DivGro has grown its distributions each year by at least a double-digit percentage increase. Our quarterly distribution is already 2.3x higher than our first quarterly distribution paid in January 2020.
Intuit
Intuit, founded in 1983 in Palo Alto, is the leading player in accounting and tax software, counting more than 100 million customers among American households and small businesses. Its advantages can be understood through the eyes of the countless accountants whose practices, and clients, use its software every day. Since Intuit’s incumbency stretches back many years, these accountants have been trained on Intuit software — often exclusively, and for their entire careers — and as such have become highly proficient in it. The repercussions? The prospect of migrating to a competitive system poses diminishing returns; not only would accountants require an extensive re-learning of different software, but this process would also effectively undermine an existing skill set — with the net effect that accountants become increasingly glued to Intuit, reinforcing its position. Plus, because Intuit’s software is deeply embedded in the businesses of their clients, conversion to new software would make most sense if both accountant and client moved over — a tough ask in light of the risks involved in such a delicate conversion. In short: there is no-to-low incentive to switch elsewhere. Instead, as the tax code becomes more complex and Intuit adds new modules with high-margin adjacencies, its users become increasingly locked into its ecosystem, solidifying the path for the company’s expansion of its 14-year record of continuous dividend increases above 15 per cent per annum compounded.