The DivGro Weekly—16.09.22

106 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when Texas Instruments raised its quarterly dividend by 7.8%.

We also collected our quarterly dividends from Cintas and S&P Global, and became entitled to our quarterly dividend from Domino's.

Since DivGro's inception we have predicted and benefited from 106 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.5%.

Domino's, tracing its origins to a single store in 1960, has proven especially difficult to compete against. Combining a much-loved product with its low-cost leadership in most of its markets, Domino's offers customers a hard to match value proposition while also enjoying superior margins. With low setup costs and rapid payback, Domino's offers franchisees an equally compelling proposition, in turn elevating their motivation to better serve customers and continue to roll out new stores. Unlike many franchising systems which are primarily transactional, a key Domino's advantage is that the vast majority of franchisees began as delivery drivers or pizza makers, meaning that when they come to open their own stores Domino's is already intimately familiar with their new business partners, while new franchisees are experienced in the Domino's system. It follows that Domino's franchisees are unusually successful relative to most other franchising systems, helping underwrite a superb dividend growth profile, rising 5.5x in 9 years.