The DivGro Weekly—27.09.24
169 Consecutive dividend increases
Weekly Dividend Progress
This week we received further real-time, tangible evidence of outstanding business progress when Texas Instruments raised its dividend by 4.62%. We also collected our quarterly dividend from SBA Communications, 15.29% 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%.
Texas Instruments
Born in the 1930s, Texas Instruments (TI) has grown into a global industry leader in analog semiconductors, developing impressive bona fides to boot. Most recently, the company crossed the 21-year milestone of continuous annual dividend increases, rising at a phenomenal rate of nearly 20 per cent per annum compounded. This feat is all the more special given the analog semiconductor industry is widely viewed as cyclical, even among its participants. So, what allows TI to thrive? Given analog chips obsolesce at a glacial pace and are typically engineered into products with long life cycles of up to 30-40 years, the industry lends itself well to companies that can invest generously today for a lucrative future payoff. But that’s not TI’s sole point of difference. Unlike most of its competitors, who outsource fabrication and rely on knick-of-time inventory, TI controls its own fabrication and inventory, often holding several years’ worth of it. The net result? When demand lifts suddenly and periodically — and TI’s competitors cannot meet said demand —the market is forced to be accommodated by TI, and resultantly, is left to engineer TI chips into long-lived processes. So ensues a virtuous cycle that simultaneously reinforces TI’s dominance and enables its market share to grow over time. TI has more than 100,000 customers across 80,000 product lines today. Plus, with the financial strength to out-invest competitors and the resources to be well-supplied at all times, the company continues to fortify its forward track, underpinning an expectation of continued strong dividend growth in the future.