The DivGro Weekly—05.04.24

160 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when we collected our quarterly dividends from ADP, Domino’s Pizza, Nike, Pepsico and Wingstop, all much higher than this time last year.

How We Are Tracking

Since DivGro's inception we have predicted and benefited from 160 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.9%.

ADP

For more than 70 years, ADP has nurtured its reputation as king of payroll processing, exemplifying two virtues of scale that have enabled the business to remain atop competitors. With decades onside, ADP has successfully scaled both client trust and knowledge mastery of the requisite infrastructure to accommodate more than 40 million workers, across 140 countries, across more than one million diverse businesses today. Its clients trust that ADP is not only proficient in its payment function (i.e. the intricacies behind divisions of salaries from gross to net as well as timely and accurate payments) but that it is also a safe and trustworthy custodian for all employee-related cash deposits. The subtext: while competitors may upskill their payment processing capabilities in a particular business or state, ADP’s global presence coupled with its creditworthiness, developed over multiple decades, solidifies a proverbial wall that is near-impossible to climb. Plus, while ADP is the global market leader with $18 billion in sales, the business has only captured approximately 12 per cent of the total market, meaning ADP faces a huge potential runway wherein it can significantly expand its market share and grow its dividend trajectory as it leans into its 50th consecutive year of high dividend growth.