There are few companies on the ASX that have been around for half as long as Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which has been on the ASX since 1903.
Soul Patts may not be a name recognised by some younger investors, but I think it's one of the best shares on the ASX.
It's an investment conglomerate which is often likened to Warren Buffet's Berkshire Hathaway.
Here are a few of the reasons why I like Soul Patts a lot:
- It has consistently paid a dividend throughout its history, even through wars
- It has increased its ordinary dividend every year since 2000, giving shareholders excellent income
- It pays out a sustainable amount of its profit each year as a dividend. Its latest report shows that 77.9% of regular operating cash flows were paid as a dividend
- It has a diverse portfolio of long-term growing businesses such as TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW) and Australian Pharmaceutical Industries Ltd (ASX: API)
- Management are very shareholder-aligned, as they are some of the biggest shareholders themselves
- Management are long-term focused, with several generations of the same families serving the company
Soul Patts has one of the best records out of any company for delivering reliable returns. I wouldn't recommend betting the house on a single stock, but Soul Patts would be high up the list if I had to.
Is Soul Patts a buy at today's price?
Soul Patts is currently trading at 15x FY18's estimated earnings with a grossed-up dividend yield of 4.3%. This isn't dirt cheap, but I think it could be a pretty good price for an ultra-long-term investor.
I am looking to buy more shares in Soul Patts, but I'm hoping that the shares drop into the low $16s or even lower before I push the buy button. If the Australian economy does go through a bit of a dip then Soul Patts could trade at more attractive value at some point.
