The DivGro Weekly—01.11.24
170 Consecutive dividend increases
Weekly Dividend Progress
This week we received further real-time, tangible evidence of outstanding business progress when Visa raised its dividend by 13.46%. We also became entitled to our quarterly dividends from Texas Instruments and Zoetis, both meaningfully higher than this time last year.
How We Are Tracking
Since DivGro's inception we have predicted and benefited from 170 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.74%.
Distribution
Last week, we paid our 20th consecutive quarterly distribution. Notably, this distribution is 11.2% higher than the same time last year. DivGro has grown its distributions each year by at least a double digit percentage increase. Our quarterly distribution is already 2.3x higher than our first quarterly distribution paid in January 2020.
Zoetis
Zoetis, our apex predator of the animal health industry (originally founded in 1952 as Pfizer Animal Health), has developed a distinctive dividend track record. Since its 2013 IPO, it has grown its dividend at around 18 per cent per annum compounded. How? The total market is large but comprises many, relatively small treatment niches. Once a niche is occupied — say, by a leader like Zoetis — there is little residual economic incentive for a second or third entrant, clearing the express lane for Zoetis to dominate. The result? For more than 70 years, Zoetis has expanded from toehold to stranglehold across a multitude of said niches. The company repeatedly captures a dominant share position, with extremely high and enduring profit margins in categories including dermatology and osteoarthritis pain in dogs and cats. Zoetis is often the first to introduce a novel treatment, creating new niches and expanding the market. Thanks to its longstanding reputation, these treatments often become the de facto standard, activating a virtuous cycle and reinforcing the company’s privileged position. This dynamic, set against the backdrop of an industry due to double its sales within the next decade, and coupled with Zoetis’s unique set of advantages, safeguards its place atop the food chain and the continuation of its impressive dividend growth.