The DivGro Weekly—12.04.24
161 Consecutive dividend increases
Weekly Dividend Progress
This week we received further real-time, tangible evidence of outstanding business progress when Costco raised its dividend by 13.7%. We also collected our quarterly dividend from FirstService and became entitled to our quarterly dividends from American Express, Intuit, Mastercard and Roper, all meaningfully higher than this time last year.
How We Are Tracking
Since DivGro's inception we have predicted and benefited from 161 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.9%.
Distribution
Next week we will pay our 18th consecutive quarterly distribution. Notably, this distribution is 11.2% higher than the previous one. DivGro has grown its distributions each year by at least a double-digit percentage increase. Our first quarterly distribution was paid in January 2020 in the amount of $0.0012 and is now $0.00278 - i.e. 2.3x higher.
Costco
Costco, the unrivalled haven of customer trust, has established itself as standard-bearer of membership-led retail, advocating for members by offering products at the sharpest prices to empower them to economise where possible and boost customer satisfaction. Its latest enterprise — the introduction of gold bars for sale — is an appealing drawcard for both current and new customers and highlights another instance where Costco has struck gold to the tune of an estimated $200 million per month only a few months since initiation. The company’s edge in this endeavour is significant. Why? Unlike traditional pathways to own physical gold, which are lined with frictions (purchaser discomfort; premiums; spreads; fees; questionable seller integrity), Costco offers a secure, trustworthy and virtually frictionless, cost-effective way to purchase gold, charging a mere two per cent above its spot price. These unparalleled advantages pale against the costs of a Costco subscription, meaning the company can now capture an entirely new stream of buyers in search of a safe, seamless purchase experience, who should grow accustomed to maximising their membership value beyond their purchase of gold. This exposure to a potentially sizeable market — wherein other participants are highly fragmented and often perceived as untrustworthy and self-motivated rather than customer-oriented — is demonstrative of Costco’s ingenuity, which powers the company’s growth and impressive dividend trajectory, exemplified in its recent dividend increase of 13.7 per cent (in addition to the significant special dividend received in January).
