The DivGro Weekly—22.09.23

137 Consecutive dividend increases

This week we received further real-time, tangible evidence of outstanding business progress when Microsoft raised its dividend by 10.3% and American Tower by 10.2%. We also collected our quarterly dividends from Cintas and SBA Communications, both much higher than this time last year.

Since DivGro's inception we have predicted and benefited from 137 consecutive dividend increases across our portfolio companies. The average rate of these dividend increases is 15.3%.

SBA Communications is rapidly growing its portfolio of wireless communication towers. Wireless towers have unique attributes that consolidate their position as privileged assets while deterring competitors. How so? Municipalities recognize that mobile coverage is essential for the viability of any community, while equally aware that having multiple towers in any neighborhood is undesirable and so they tend to allow only one tower per coverage area. This embeds each tower with pride of place—but the privilege becomes further compounded: a single tower can host multiple tenants, adding rent at almost no incremental cost, a dynamic which sees mature multi-tenant towers earn outstanding returns on investment. This profile has enabled SBA’s dividend to grow 130% since it was added to the DivGro Fund less than 4 years ago, a dividend trajectory with an attractive and highly visible future runway.

Yesterday we were interviewed by ausbiz about why a dividend growth strategy is so valuable. You can watch an extract here or the full interview by clicking the picture below (requires free registration).