The DivGro Weekly—15.09.23

135 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividends from Home Depot, S&P Global and Microsoft, and became entitled to our quarterly dividend from ADP, all significantly higher than this time last year.

Since DivGro's inception we have predicted and benefited from 135 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.4%.

ADP (Automatic Data Processing), traces its origins back more than 70 years and has entrenched itself as the dominant force in payroll processing in America. While payroll processing was once a fairly straightforward matter, it has evolved into a highly complex touchpoint involving wages, withholding taxes, insurance payments, healthcare deductions, superannuation allocations etc., aspects of which often encompass age or state-specific additional requirements. As soon as a business grows beyond relatively few employees, payroll, or Human Capital Management as it is known today, becomes a complicated and error prone matrix of payment, regulatory, legal and morale risks best outsourced to an ADP. Indeed, ADP touches 1 in 6 workers in the US, and with such immense scale can profitably provide this critical function for a seemingly nominal payment per employee. As the incumbent leader in its space, ADP is excellently positioned to benefit from the growth of American (and increasingly global) business, and extend its superb dividend record which has grown at an impressive rate every year for 48 consecutive years.