The DivGro Weekly—22.03.24

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 Cintas, Moody’s and Home Depot and become entitled to our quarterly dividends from Domino’s, SBA Communications and Poolcorp, all much higher than this time last year. We also featured on ausbiz this week, where we discussed another DivGro holding, Wingstop. The interview can be accessed here.

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%.

Poolcorp

For more than 40 years, Poolcorp has continuously consolidated its position as titan of wholesale pool supplies and equipment, now owning approximately 30 per cent market share in North America and growing its dividend at around 20 per cent per year since originating dividends in 2004. What breeds the company’s competitive edge? Being an industry heavyweight in an environment of smaller, fragmented competitors means Poolcorp accrues ongoing benefits from a unique set of economics that strengthen with time. Broader inventory, sharper prices, better locations and faster fulfilment presently function as guardrails against competition, reinforcing Poolcorp’s dominance while also optimising its ability to operate better, advertise more efficiently and increase the likelihood that it outpaces others in the future. Plus, the nature of its niche — pools require ongoing maintenance and eventual repair — provides further scaffolding for future growth, effectively locking in its existent user base forever. The full ambit of Poolcorp’s growth potential extends further. Poolcorp’s investment in community swim programs highlights a powerful reciprocity where both users and the business benefit in a virtuous cycle; the more swimmers there are, the more desirable pools become and the more usage they get. These many advantages reinforce a promising trajectory ahead, wherein Poolcorp continues to outdistance competitors, expand market share and accelerate its dividend growth.