The DivGro Weekly—15.03.24

160 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividends from Microsoft and S&P Global and became entitled to our quarterly dividends from ADP and Wingstop, all higher than this time last year.

How We Are Tracking

Since DivGro's inception we have predicted and benefited from 160 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.9%.

Wingstop

In 2024, Wingstop, our beloved fast-food holding with 2200 stores, celebrates two key milestones: crossing its 30th year in operation since 1994 and its seventh year of continuous dramatic dividend increases since initiating quarterly dividends in 2017. Unlike most franchise formats, whose stores typically reach maturity in a shorter timeframe and who thus resort to taking price to grow same-store sales, Wingstop exhibits a highly differentiated and noteworthy pattern. Its original stores, from the 1994 cohort, continue to grow sales today without meaningfully raising prices, meaning Wingstop is incentivising new customers to transact and existing customers to return more often with aplomb. In contrast to weaker formats, Wingstop’s unique ability to not take price enhances value for customers relative to competitors. So, what makes each of Wingstop’s commercial arteries behave like wellsprings of sales growth, without meaningfully lifting prices? Impressive and consistent same-store sales growth, in tandem with a fast-moving store rollout, combine to generate rapid growth in advertising dollars which drive exposure and foot traffic as Wingstop becomes ingrained in the minds of consumers. Plus, 1400 contracted opening commitments — a considerable number relative to an existing store base of 2200 — further evidence significant expansion in the pipeline. With exceptional franchisee returns exceeding 70 per cent and occasional-but-substantial special dividend handouts, Wingstop is primed for stellar future growth and a promising dividend trajectory.