The DivGro Weekly—10.05.24

162 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when we collected our dividends from Hermès, Evolution AB and Lowe’s and became entitled to our quarterly dividend from Texas Instruments, 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%.

Hermès

In the last two years, Hermès, the hallowed house of utmost luxury, boosted its regular dividend by nearly 90 per cent — atop a most welcome bonus special dividend payment. With 187 years at the pinnacle of premium leather goods, Hermès has established a unique mastery over the perennial conflict between art and commerce, finessing its products in order to trump competitors on both fronts of form and function. How so? For starters, its legendary craftsmen are only able to work on Hermès leather goods after completing arduous in-house training; mastery of the house’s signature saddle stitch, for example, is a skill which takes years to cultivate. But Hermès applies its exacting eye to its products once they leave the maison too. In order to quash counterfeiters, Hermès undertook an upgrade of its zippers, plating them in gold and palladium to further differentiate its bags from potential knockoffs and simultaneously bolster the value of their leather goods, enhancing the rarefied quality and status they signify. The net effect? By constantly implementing improvements to its products, Hermès benefits from a virtuous trifecta: careful updates reinforce the evergreen appeal of its products, thus enabling Hermès to persistently outdistance competitors and not only take premium price but increase it too, underpinning the company’s enormous profitability and likely extension of its excellent dividend record.