The DivGro Weekly—03.05.24

162 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when Poolcorp raised its dividend by 9.1%. We also collected our dividends from L’Oréal, Stryker and Watsco and became entitled to our dividend from Evolution AB, all meaningfully higher than this time last year.

How We Are Tracking

Since DivGro's inception we have predicted and benefited from 162 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.9%.

Poolcorp

Poolcorp, originally a team-of-two pool shop, has transformed into something remarkable today, commanding 30 per cent market share in North America as the default distributor of pool supplies and equipment. This dominance, of course, generates propulsive domino effects: Poolcorp provides the broadest inventory, fastest fulfilment, sharpest prices and best-in-class services and locations, wresting market share from competitors who cannot provide a similarly frictionless experience. But scale alone is not responsible for Poolcorp’s success. In a fragmented ecosystem where loyalty is highly dispersed, Poolcorp’s durability is cleverly baked into its business structure, with the end customer (i.e. the homeowner) locked into necessary and ongoing maintenance services ad infinitum. While Poolcorp works to expand market share, this lucrative channel simultaneously exposes the company to an annuity-like revenue stream that further outdistances Poolcorp from aspirant competitors and which can be redirected towards advertising spend and operational optimisation. A promising omen that this special sauce is working? The company just raised its quarterly dividend by 9.1 per cent, building on an impressive growth cadence of above 15 per cent per year since its maiden dividend in 2004.