Wolters Kluwer - A Dutch dividend compounder

A sneak peek into our TDI deep dive from September 2025. The turtle often beats the haze.

When most investors think about dividend growth stocks, they picture American consumer giants like The Coca-Cola Company or PepsiCo, or global oil majors, like Exxon Mobil and Shell. But sometimes, the most reliable compounders are found much closer to home. At least, for us. Wolters Kluwer, a Dutch information and software provider, is one of them.

This company may not be one of those ‘hot stocks’, yet its dividend story is one that is remarkable. The shareholder policy rewards patience, discipline, and long-term ownership.

From print to digital

Wolters Kluwer started life as a publisher of schoolbooks. Over the years, it began teaming up with its rivals, growing bigger and bigger until it was ready to go public. In 1986, it was listed on the Amsterdam stock exchange, at a modest €180 million market cap.

The real turning point came under CEO Nancy McKinstry, who became CEO in 2003. She looked at the company, saw its dusty bookshelves, and decided it was time for a major change. She led a complete digital makeover, transforming that "old school" publisher into a modern, technology-driven company. Fast forward to today, and you'll find that more than 95% of its money now comes from digital products, not books.

This transformation extended beyond mere growth, forging the business into a high-margin, cash-generating engine. And that cash still finds its way into the pockets of shareholders.

A diversified business model

Let’s first get an understanding in Wolters Kluwer’s business model. Wolters Kluwer operates in markets where information is absolutely critical and regulation is unavoidable. Its portfolio is divided into five global divisions:

• Health (27% of revenue): The flagship product here is UpToDate, a clinical decision support tool used by over 2 million doctors worldwide. Another key platform is Ovid, which provides universities and hospitals access to medical literature. Doctors and hospitals cannot compromise on accuracy, which makes these products indispensable.

• Tax & Accounting (largest division): Products like CCH Axcess and ProSystem fx are embedded into accounting workflows. In fact, 94 of the top 100 U.S. accounting firms rely on them. Once installed, these systems are not easily replaced, creating high switching costs.

• Financial & Corporate Compliance: The best-known product is OneSumX, a reporting platform that helps banks comply with rules like Basel III. As regulations evolve, OneSumX updates automatically, sparing clients the complexity of keeping up.

• Legal & Regulatory: Tools such as Kluwer Arbitration provide lawyers with access to case law and commentary across jurisdictions. This division is more fragmented by country, which makes it less profitable than the others.

• Corporate Performance & ESG: Products like CCH Tagetik and Enablon help CFOs with reporting, budgeting, and ESG compliance. For example, Enablon allows multinationals to track carbon emissions across factories.

What ties all these divisions together is simple: they provide solutions clients absolutely cannot do without. For businesses in these fields, the risk of serious mistakesm whether a legal misstep, a medical error, or a compliance failure, is too high to operate without these tools. They don't choose to buy these products; they have to.

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Dividend growth as a policy

Wolters Kluwer has a progressive dividend policy, and that’s good news for investors. It simply means the dividend per share never goes down, it either rises or stays the same. In fact, the company has been raising its dividend every single year for decades. The dividend has been growing at a healthy 7.3% a year since 2015. That might not sound dramatic, but it really adds up in a big way over time.

Consider a shareholder who started with a mere €0.30 per share in 2005 and is now receiving over €1.70, a clear illustration of the policy's long-term value.

A big reason the dividend keeps growing is because Wolters Kluwer spends about €1 billion a year buying back its own shares. Think of it this way: when they reduce the total number of shares out there, it makes each remaining share more valuable. This shrinking share count helps boost earnings per share and gives the company more room to keep raising the dividend in the future.

Why it works

The reliability of Wolters Kluwer’s dividends comes down to the nature of its business. Its products are not optional. The company sells products that people absolutely need.

Accountants need CCH Axcess to file taxes.

Doctors use UpToDate in emergency rooms.

Banks rely on OneSumX to stay compliant with capital rules.

Wolters Kluwer is one of these ‘must haves’, not ‘nice to haves’. It also means customers rarely leave, with retention rates above 90% in some areas. This incredible stability is what gives management the confidence to send capital back to shareholders, without fail.

Conclusion

Wolters Kluwer's long-term value is a direct result of its disciplined strategy. By building a business around essential products, regulation, and recurring revenue, the company has created a powerful moat that leads to highly stable free cash flow. This financial predictability forms a virtuous cycle that allows for a consistent and growing return of capital to shareholders through dividends.

For the patient investor, Wolters Kluwer is the kind of stock you buy, hold, and let the dividends do their work.

Our latest deep-dive analysis on Wolters Kluwer is now available for our TDI-premium members. You will learn more about the moat of the business, as well as the opinion of our analysts.

We’d love to welcome you as a member.

Have a wonderful day and happy investing.

The Dutch Investors