The DivGro Weekly—14.10.22

108 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when we became entitled to our quarterly dividends from Abbott, American Tower and Watsco.

We are pleased to report that next week DivGro will be paying its 12th consecutive quarterly distribution. This distribution is 11.5% higher than the same quarter last year.

Since DivGro's inception we have predicted and benefited from 108 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.5%.

Expertly controlled by the Nahmad family since 1972, Watsco enjoys the privileged position of dominant leader in the HVAC distribution value chain. By far the largest player in its space, and much bigger than each of its competitors, Watsco accrues all of the expected scale advantages of such a market structure. It is therefore extremely difficult for competitors to challenge its dominant position, or for outsiders to enter effectively, made even less likely by the (apparent) unexciting nature of the HVAC distribution industry. Often overlooked is the fact that notwithstanding Watsco's industry leadership, it is still relatively small compared to the total size of the HVAC distribution market in North America. Watsco therefore has a significant opportunity to profitably extend its market share far into the future which should underwrite the continued trajectory of its already outstanding dividend growth record.