The DivGro Weekly—06.09.24

167 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when we received our quarterly dividends from Poolcorp, MSCI, Cintas and Visa. We also became entitled to our quarterly dividends from Home Depot and Nike, all meaningfully higher than this time last year.

How We Are Tracking

Since DivGro's inception we have predicted and benefited from 167 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.83%.

Home Depot

Home Depot — who together with Lowe’s, another key DivGro holding, occupies the home repairs throne — has produced an astounding dividend growth record. Since its maiden dividend in 1987, the company has raised its dividend with aplomb, generating a cumulative increase of more than 5100x. This has powered an equally remarkable increase in its share price. So, what are the underlying drivers of its success? Of the ~$1 trillion annually spent in the North American home improvement category, 20 cents of every dollar passes through a Home Depot store; a further 13 cents passes through Lowe’s stores. That conjures a powerful image of Home Depot’s size advantage. This advantage translates into a near-unassailable cost leadership that allows both Home Depot and Lowe’s to profitably sell their merchandise below the cost of smaller competitors. With this dynamic at play, both behemoths seem destined to progressively increase their market shares. That’s why, at every earnings call, Home Depot emphasises its expectation to take extra share under all market conditions. How so? Time is on the company’s side. As homes increasingly age — and with more than half of 140 million North American homes already more than 40 years old — Home Depot is poised to extend its dividend growth record for the foreseeable future, so long as every house has a roof over its head.