The DivGro Weekly—15.11.24
172 Consecutive dividend increases
Weekly Dividend Progress
This week we received further real-time, tangible evidence of outstanding business progress when Roper Technologies raised its dividend by 10%. We also became entitled to our quarterly dividends from Visa, Poolcorp and SBA Communications and received our quarterly dividends from Mastercard and Texas Instruments, all meaningfully higher than this time last year.
How We Are Tracking
Since DivGro's inception we have predicted and benefited from 172 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.68%.
Poolcorp
This past October, Poolcorp, the world’s leading distributor of pool supplies and equipment, marked 29 years since its 1995 IPO. This is an especially auspicious number given that, in as many years, Poolcorp has produced outstanding total returns of nearly 29 per cent per annum compounded. Not by coincidence — Poolcorp’s success has been facilitated instead by its rare competitive profile. How so? For one, pool supplies distribution is a highly fragmented sector, meaning most constituent players are small and sub-scale. Set against this backdrop, Poolcorp’s share of the market — approximately 30 per cent — instils the company with manifold and significant scale advantages. These translate into Poolcorp becoming a preferred distribution conduit for more than 200,000 pool-related parts and supplies, as well as a preferred purchase channel for more than 100,000 independent pool installation and maintenance operators. While Poolcorp can offer such operators wider inventory, faster and superior service, superior technology, and sharper prices, optimising their time and money, the benefit accrues to Poolcorp too; these advantages allow Poolcorp to seamlessly enter new markets and quickly establish a dominant position. As smaller competitors, without these privileges, wrestle against the current, Poolcorp enjoys a virtuous cycle. Once pools are built, they effectively require maintenance supplies forever, which bodes well for Poolcorp’s future dividend trajectory, having grown its dividend over the last 20 years at a sensational compounded rate of about 20 per cent per annum.