The DivGro Weekly—23.01.26
206 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 Intuit, Roper Technologies and Heico and became entitled to our quarterly dividends from Watsco and Lowe’s, all meaningfully higher than this time last year.
How We Are Tracking
Since DivGro's inception we have predicted and benefited from 206 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14.2%.
Distribution
This week, we paid our 25th consecutive quarterly distribution. Notably, this distribution is 11.5% higher than the same time last year. DivGro has grown its distributions each year by at least a double-digit percentage increase. Our quarterly distribution is already 2.7x higher than our first quarterly distribution paid in January 2020.
Lowe’s
Lowe’s, in business for more than a century, dominates the one trillion-dollar US home improvement, repair and maintenance channel alongside sister DivGro holding Home Depot, together commanding combined market share above 30%. So, what accounts for its supremacy? For most homeowners, their home is their most significant asset. Nevertheless, homes gradually deteriorate and require ongoing repair and maintenance that accelerates as homes age. Since Lowe’s (and Home Depot) translate scale benefits into unmatched and sustained price leadership, and choose not to co-locate, both are able to expand at will within their territories and enjoy high and predictable profitability. While intermittently new housing construction may lag or consumers may reign in their home-focused spending, home deterioration inevitably continues, providing an installed base of ageing houses into which to grow market share and profitability. With a spectacular dividend record — Lowe’s boasts 64 years of annual dividend increases since its 1961 IPO at a compounded rate above 15% — which has in turn driven a 7000-fold share price increase, the company’s fortified market position should facilitate an extension of its impressive dividend growth trajectory.