The DivGro Weekly—11.10.24
169 Consecutive dividend increases
Weekly Dividend Progress
This week we received further real-time, tangible evidence of outstanding business progress when we received our dividend from FirstService. We also became entitled to our quarterly dividends from Roper Technologies, Mastercard and Intuit, all meaningfully higher than this time last year.
How We Are Tracking
Since DivGro's inception we have predicted and benefited from 169 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.75%.
Roper Technologies
Relatively few businesses are demonstrative of exceptional success powered by masterful acquisitive growth yet Roper Technologies, with its 130-plus-year history, is a superlative textbook example. How so? Since 1993, the company has posted a phenomenal dividend growth record, to the tune of approximately 15 per cent per annum compounded, with its stock price following suit. In its formative years, Roper’s focus was primarily on industrial applications and in more recent decades it has pivoted to critical software applications, given their ‘stickier’ appeal and higher margin profile. This evolution has shaped the ‘Roper Way’: the company carefully targets mission-critical niche businesses with a filtering system that prioritises the competitive dynamics within the niche, ensuring Roper can eventually dominate it, and the degree to which the software is relied upon by its customers, indicating pricing power. While Roper chases immediate lucrative returns — intended as a forever home for acquired businesses — the company can take a longer view than most other prospective acquirers, often proving to be an acquirer of choice which is able to nurture its acquisitions on its own terms. Then, over time, both organically and via further acquisitions, Roper extends the dominant position of its mission-critical businesses, translating into scale and margin benefits that generate enormous profitability. The ultimate upside? This unique approach underlies an effectively endless gamut of possible niches, such that the company has latitude to exercise its Roper Way and conquer more niches for the foreseeable future while driving the growth of its dividend onwards and upwards.