Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is a company steeped in history and with an enviable track record.
Over the past 15 years the investment house which owns a diversified portfolio of businesses and could be described as Australia’s very own mini-version of Warren Buffett’s Berkshire Hathaway has continuously increased dividends at a compound annual growth rate (CAGR) of 11.3%.
Meanwhile, the conservative and value-focused company has achieved total shareholder returns (TSR) of 13.4% per annum – a result which has provided shareholders with outperformance against the All Ordinaries Accumulation Index of 5.3%!
Given this impressive historic track record of Soul Patts (as it is known) with the company just releasing its full-year results for the year ending July 31, now could be the perfect opportunity for investors to take a closer look at the stock…
– There was improved earnings performances from investee companies with:
- TPG Telecom Ltd (ASX: TPM) up 30.5%
- Brickworks Limited (ASX: BKW) up 15.2%
- New Hope Corporation Limited (ASX: NHC) up 19.8%
- Australian Pharmaceutical Industries Ltd (ASX: API) up 24.3%
– The solid performance from Soul Patts investment portfolio led to an overall 27% increase in regular profit after tax to $156.4 million.
– The board also raised the full year dividend by 4.2% to 50 cents per share
Could it still be a Buy?
Perpetual Limited (ASX: PPT) has previously agitated for the board of Soul Patts to dismantle the cross-shareholding structure the group shares with Brickworks Limited in the belief that this will unlock value for shareholders in these two companies.
While the jostling with Perpetual appears to have quietened down for the time being, based on the after-tax net portfolio value of $18.37 per share and Soul Patts current share price of $14.32, Perpetual’s view that the market is not ascribing full value to the stock could well be correct and indeed Soul Patts could be worth a closer look by long-term patient, value investors.
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Motley Fool contributor Tim McArthur owns shares in Perpetual Ltd. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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