P10, a multi-asset class private market solutions provider, recently held its Q1 2024 earnings call. The usual Wall Street analysts were there, dissecting P10's performance, growth strategies, and the looming shadow of the Crossroads transaction. However, amidst the flurry of questions about fee rates and M&A pipelines, a fascinating narrative was quietly unfolding - P10's dividend has been steadily climbing, even as the company's stock price has been drifting downwards.

On the surface, this might seem counterintuitive. Companies facing stock pressure often resort to dividend cuts or freezes, aiming to preserve capital and appease jittery investors. But P10 has chosen a different path, steadily increasing its dividend, even as its stock trades at a discount to its peers. The Q1 earnings call witnessed an 8% increase in the quarterly dividend, bringing the annual distribution to $0.14 per share. This follows a similar 8% increase in the previous year, highlighting a consistent upward trajectory for the payout.

"The key to understanding this seemingly paradoxical approach lies in P10's unique ownership structure and its unwavering confidence in its long-term growth trajectory. P10 employees constitute the largest ownership bloc in the company. This insider ownership creates an inherent alignment between the company's leadership, its employees, and the broader shareholder base. They are, in essence, betting on their own success, and the steadily increasing dividend serves as a tangible manifestation of this shared conviction."

The Q1 transcript reveals palpable frustration with the market's undervaluation of P10. CEO Luke Sarsfield stated, "<span style="font-style: italic;">Our dissatisfaction with the current valuation pressure we face in the public market..."</span> adding that "<span style="font-style: italic;">the current trading levels present a compelling entry point for investors."</span> This sentiment underscores P10's belief that the intrinsic value of the business is not reflected in the stock price.

Revenue Growth vs. Stock Price Decline

P10's stock price has declined by approximately 35% from its 52-week high. This decline has come despite consistent double-digit revenue growth and strong profitability. The chart below illustrates this divergence.

Dividend Yield Comparison

The 8% increase in the annual dividend to $0.14 per share translates to a dividend yield of approximately 1.77% based on the current stock price. This yield is considerably higher than the average dividend yield of the S&P 500, which stands at around 1.5%.

Reference: P10, Inc. (PX) Q1 2024 Earnings Conference Call, May 8, 2024.

Hypothesis: A Signal of Confidence

P10's leadership, bolstered by its significant employee ownership, believes that the market is mispricing the company's future prospects. They are using the dividend as a signaling mechanism, a means of communicating their unwavering confidence in their long-term growth plan. This strategy is aimed at attracting value-oriented investors who recognize the potential for a significant upside as P10's growth story unfolds.

"**Fun Fact:** The term "Dividend Whisperer" is a playful analogy to the "Horse Whisperer," highlighting the subtle yet powerful communication P10 is attempting through its dividend policy. It suggests an understanding and mastery of a complex situation, a belief that actions speak louder than words."

The market, of course, will ultimately decide whether P10's strategy succeeds. But one thing is clear: the company is taking a bold and unconventional approach, betting on itself and sending a clear message to the investment community. This dividend whisper, if amplified by successful execution of their growth plans, could transform into a resounding roar of success, rewarding those who listened closely and believed in the potential of a company marching to the beat of its own drum.