The DivGro Weekly—18.09.26

224 Consecutive dividend increases

Weekly Dividend Progress

This week we received further real-time, tangible evidence of outstanding business progress when Microsoft increased its dividend by 7.7%. We also collected our quarterly dividends from Mobility Global, S&P Global, Alphabet, Interactive Brokers and Cintas and became entitled to our quarterly dividend from ADP, all meaningfully higher than this time last year.

How We Are Tracking

Since DivGro's inception we have predicted and benefited from 224 consecutive dividend increases across our portfolio companies, with no decreases. The average rate of these dividend increases is 13.9%.

ADP

Established more than 75 years ago, ADP is the global market leader in payroll and HR solutions. While perhaps straightforward with few employees, payroll processing becomes incredibly complex at scale. Moreover, given an ever-changing regulatory landscape in each jurisdiction, payroll processing is subject to a myriad of specific requirements spanning compensation, leave, taxation, insurance, healthcare, benefits, savings systems such as superannuation etc. Therefore, successful oversight of payroll is both challenging and important — especially since errors, such as late, incorrect, or missing payments — are certain to harm a business and its employees. The combination of scale and earned trust makes it difficult for aspirant competitors to match ADP, who would likely also need to undercut ADP’s nominal fees per employee. Given ADP’s scale advantages, outstanding processing record and custodial oversight of client money and extremely low per-employee processing fee, a client company would be hard-pressed to comfortably shift this role elsewhere. With ADP’s time-tested reputation and entrenched privileges, it is ideally positioned to continue extending its leadership, underpinning a foreseeable extension of its 50-plus years of formidable dividend growth.