DivGro ⏤ a growth fund powered by fast rising dividends.
We are the go-to home for investors seeking above average returns that are easier to hold.
How we work
“What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding the framework.” — Warren Buffett
At the heart of DivGro lie dividends. Not any dividends: only those that grow rapidly and consistently, and which are paid by outstanding companies. Why? Because dividends are the most reliable proxies for true company performance. (Plus, they are universally understood and easy to see and touch given they are paid in cash). But how do we know this to be true?
Enter The Gordon Growth Model. In the late 1950s and early 60s, MIT Professor Myron Gordon and his Nobel Prize-winning team set out to determine the best and most predictive variable to reflect intrinsic company performance. Their findings? Over time and at various points in time, the rate of change in the dividend is reflected by a roughly commensurate rate of change in the share price. Simply put: if, for example, a company can grow its dividend every year for a long time at a rate of 13 per cent per year, over time and at various points in time, its share price is expected to also appreciate at 13 per cent per year.
Where the dividend goes, the share price follows.
On that basis, DivGro developed its philosophy that:
→If you could identify those uninterrupted dividend growers (ie companies which can grow their dividends rapidly and consistently every year) and;
→If you on-paid and encouraged investors to anticipate those receipts in their bank accounts and;
→If you communicated this dividend growth progress actively, systematically, and understandably, then:
1) The Gordon Formula can be redeployed to enable investors to focus on dividend progress as their arbiter of success and;
2) By implementing a weekly feedback loop that anchors investors to positive data points and recalibrates investor focus, DivGro arms investors with a sound psychological framework. This enables investors to follow a company’s true underlying value rather than focus on the erratic behaviour of its share price and therefore bolsters the likelihood of achieving their desired investment outcomes.
Scroll for snapshots of The DivGro Weekly ↓
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Weekly Progress Update—24.11.23
“This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividends from Costco and MarketAxess and became entitled to our quarterly dividends from Wingstop and Moody’s, all higher than this time last year.
…Price leadership, unwavering loyalty and a global opportunity to expand its 120-million membership base differentiate Costco's lucrative formula, providing significant runway to extend its outstanding dividend growth record, exceeding 13 per cent per annum compounded for the last 20 years (plus several hefty special dividends along the way).”
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Weekly Progress Update—27.10.23
“This week we received further real-time, tangible evidence of outstanding business progress when Visa announced a dividend increase of 15.6%. We also collected our quarterly dividend from Roper and became entitled to our quarterly dividend from Lowe’s, both higher than this time last year.
…Visa has grown its dividend more than 20 per cent per year compounded since its 2008 IPO. This phenomenal record reifies Visa’s indomitable position (together with its stablemate Mastercard; another DivGro holding) as an iron toll gate on global transactions; the company exceeded 200 billion transactions last year alone.”
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Weekly Progress Update—04.08.23
“This week we received further real-time, tangible evidence of outstanding business progress when Wingstop raised its dividend by 15.8%. We also collected our quarterly dividends from Stryker and Watsco.
…With more than 110 million air-conditioning units installed in North America needing ongoing repair and periodic replacement, Watsco enjoys a long and visible runway towards extending its superlative dividend growth record.“
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Weekly Progress Update—28.07.23
“This week we received further real-time, tangible evidence of outstanding business progress when Cintas raised its dividend by 17.4%. We also collected our quarterly dividend from Roper and became entitled to our quarterly dividend from Lowe’s, both higher than this time last year.
…Lowe’s, our home improvement juggernaut, has been an unrivalled dividend growth champion, having increased its dividend every year since its 1961 IPO at a compounded rate above 15% per annum.”
PRESS:
DivGro in the news
Have you seen us on ausbiz? DivGro Co-Chief Investment Officer, Jonathan Nurick, chats rapid dividend growth and how to identify these outstanding companies.
ESSENTIAL READING
Weekly Dividend Progress
Key MATERIALs
Investor Letters
The Summaries
Factsheets
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Force500 is a unique and invaluable investment product designed and managed by DivGro.
Born out of DivGro’s pioneering innovation in psychologically-enhanced investing, Force500 redeploys this unique investment framework by overlaying it onto the S&P500, the most widely followed market index.
Applying the same foundational handholding, investors in Force500 develop a much greater resilience against the inevitable, frequent and destabilising market gyrations and in turn bolster their chances of actualising their desired investment outcomes. Without Force500, history shows most investors tracking the index fall victim to emotional pitfalls that result in untimely exits or worse results than envisaged.
FORCE500
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Visa, Texas Instruments and Zoetis.