The DivGro Weekly—03.03.23

128 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividends from Visa, MSCI and Zoetis.

Having marked our calendars, we look forward to shortly receiving our dividends from S&P Global and Moody's.

Since DivGro's inception we have predicted and benefited from 128 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.6%.

Zoetis, our dominant animal health leader, recently won the Best New Companion Animal Product award for Solensia - the first and only therapy for osteoarthritis pain in cats. While the animal health market is worth about $45b annually, this is made up of numerous relatively small niches. Zoetis exploits this dynamic in two ways: First, by often being first to market (and sometimes only) Zoetis defines product categories, with vets becoming reluctant to switch even if alternative treatments may subsequently emerge. Second, because each segment size is relatively small, once an incumbent is entrenched it becomes commercially less attractive for aspiring competitors to enter. Indeed, this fortuitous combination has resulted in Zoetis' extreme product longevity with enduringly high margins. Enjoying this privilege, Zoetis is excellently positioned to extend its already superb dividend growth record, with its dividend having risen at an average rate above 19% per year since its 2013 IPO.