The DivGro Weekly—31.05.24

162 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividends from MSCI and Poolcorp and became entitled to our quarterly dividend from Home Depot, 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%.

MSCI

MSCI, owner of the benchmark MSCI World Index and preeminent compiler of indices outside the United States, was spun out of Morgan Stanley as an independent entity in 2007. Since its maiden dividend in 2014, MSCI has been an exemplar of stellar dividend behaviour, multiplying its dividend more than 800 per cent since initiation. What allows for this wonderful cadence? Given MSCI is the foremost compiler of indices beyond the US, the company earns near-royalty type fees from asset management firms which either benchmark against it or provide replicant products — and which accrete further value to MSCI as they grow. Plus, as these products lengthen their track records over time, MSCI’s clients become less incentivised to risk any frictions caused by change, glueing them to MSCI and solidifying its incumbency. But MSCI’s approach to leadership is multi-pronged. In a masterstroke, MSCI seized the opportunity presented by the emerging trends of ESG and climate by leveraging its reputational advantages to become the acknowledged leader in ESG and climate-decision support tools for businesses and governments. This nascent business line is growing rapidly and already represents 15 per cent of MSCI sales. As global focus on ESG and climate is only in its infancy, it provides an incredible springboard for MSCI to accelerate profitability and thereby extend its future dividend trajectory too.