The DivGro Weekly—22.05.26

218 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 Abbott and Costco and became entitled to our quarterly dividends from Cintas, Moody’s, MSCI and Wingstop, all meaningfully higher than this time last year.

How We Are Tracking

Since DivGro's inception we have predicted and benefited from 218 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 14%.

Moody’s

Moody’s, established in 1909, learned from its GFC experience that reliance on public and privately sourced disclosures alone was insufficient for its risk assessments. So, it pivoted towards more exhaustive, hyperdetailed analyses to scrutinise the source, veracity, and likely evolution of the data it chose to rely on. In addition to its highly profitable ratings business, Moody’s also repurposed these inferences into lucrative adjacent analytics businesses. Its core ratings business is privileged and protected in at least two essential ways: Moody’s ratings provide tangible cost savings such that even if a potential new ratings competitor prices its service at zero, the absence of a Moody’s or S&P Global rating (another DivGro holding) would raise the issuer’s interest rate and total cost by more than Moody’s fees. Secondly, many financial institutions such as insurers and pensions are mandated to only hold bonds with a Moody’s or S&P rating, often demanding both. Since customers use Moody’s for some of their most important decisions, and Moody’s ratings and analytics often utilise highly confidential, essentially unattainable data, to which Moody’s brings esteemed reputation and judgement, Moody’s is well differentiated in an AI environment, leading to a likely extension of its impressive dividend growth record.