The DivGro Weekly—27.10.23

140 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when Visa announced a dividend increase of 15.6%. We also collected our quarterly dividend from Roper and became entitled to our quarterly dividend from Lowe's, both higher than this time last year.

Visa's latest dividend increase extends DivGro's record to 140 consecutive dividend increases predicted and captured from our portfolio companies. The average rate of these dividend increases is 15.2%. 

Visa, our leading payments processor, has grown its dividend more than 20 per cent per year compounded since its 2008 IPO. This phenomenal record reifies Visa’s indomitable position (together with its stablemate Mastercard; another key DivGro holding) as an iron toll gate on global transactions; the company exceeded 200 billion transactions last year alone. For more than 60 years, Visa has accumulated a data bank of transactions that simultaneously 1) arms the company with insights to approve or deny transactions accurately and instantaneously, while 2) insulating Visa from competitors who lack this data advantage and therefore cannot match its processing efficacy. The result? Visa crests a profit wave that is materially unchallenged; the company generates generous net profit margins above 50 per cent. This reality, reinforced by a global runway and a rampant shift toward digital commerce, buttresses Visa’s ubiquity and proven ability to extend its superlative dividend growth.