Why I think the Soul Patts share price is a great long-term buy

The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) current share price could be a great buy and hold for the next 10 or more years.

‘Soul Patts’, as it’s more commonly called, is an investment conglomerate with a market capitalisation of $4.37 billion.

It’s been operating since 1903 and there’s no signs of it stopping any time soon. Here are three reasons why it could be one of the best buy and hold businesses on the ASX:

Diversified holdings

Soul Patts is Australia’s closest resemblance to Warren Buffet’s Berkshire Hathaway. It owns a number of large stakes in growing businesses that are in different industries, which is a good diversification strategy.

It owns large stakes in businesses such as TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), Australian Pharmaceutical Industries Ltd (ASX: API) and New Hope Corporation Limited (ASX: NHC).


Soul Patts has quite a unique management structure compared to most other businesses on the ASX. Management includes a lot of family members from families who have worked there for generations.

So far, the company has been served by five generations of the Pattinson family and three generations of the Dixson, Spence, Rowe and Letters families.

Management are also very aligned to shareholder interests as they all own large stakes in the business and want to achieve long-term success.

Dividend machine

Soul Patts has a proud record of paying a dividend to shareholders every single year including through wars, recessions and other global problems.

Management have taken a conservative yet rewarding approach of increasing the ordinary dividend for a number of years in a row. In-fact, Soul Patts has increased its ordinary dividend every year since 2000. In its latest report, it revealed that its payout ratio of its regular operating cash flows was going to be a sustainable 77.9%.

Foolish takeaway

The Soul Patts share price has grown by 20.6% in 2017, so it’s less of a good buy than it was a few months ago. However, I think it can provide investors peace of mind and a solid, growing income stream so it’s worthy of being in any investor portfolio.

Soul Patts doesn’t have the highest dividend yield. Our favourite dividend pick could provide the huge yield and growth that you need.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Washington H. Soul Pattinson and Company Limited. Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of TPG Telecom Limited. 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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