The DivGro Weekly—30.06.23

133 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividend from Domino's Pizza, and became entitled to our quarterly dividend from Stryker, both significantly higher than this time last year.

During the week Mastercard and S&P Global declared their quarterly dividends which we look forward to collecting shortly, both meaningfully higher than this time last year.

Since DivGro's inception we have predicted and benefited from 133 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.3%.

Domino's, having opened its first store in 1960, developed into a system designed to optimize for home pizza delivery. In doing so, Domino's located stores as near as possible to customers, and in higher density than most other formats, to maximize delivery speed, reliability and profitability. As the low-cost/low-price global leader, many of Domino's customers are budget sensitive, and to help serve these customers in the current inflationary environment, Domino's has vigorously promoted its 'carryout' business (self-delivery/pickup), saving these customers as much as $5 per order. Originally designed for optimizing delivery, somewhat counterintuitively, high store density is now proving a huge advantage for the carryout business, which is growing rapidly. Indeed, since there appears to be only little overlap between the delivery and carryout customer bases, there is a real prospect for Domino's to grow its carryout business significantly. This expanded runway positions Domino's to enhance its already impressive dividend growth record, having increased its dividend every year since 2013 at an annualized rate near 20% per year.