Shares in diversified investment company Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) are pushing higher today, up 1% to $17.67 following the release of the group's half-year results.
The company posted a profit after tax of $146 million, 2% down from the previous corresponding period. Regular profit after tax, the company's non-statutory measure of profit from continuing operations that excludes one-off items is up 19% to $166 million. Revenue from operations increased 25% to $550 million.
Soul Patts' portfolio consists mainly of big stakes in ASX-listed companies from various industries. As at January 31, net asset value amounted to $5.2 billion, up 16% over the previous year. The company's three largest holdings all increased in value in the first half of FY2018:
- The value of the 25% interest in TPG Telecom Ltd (ASX: TPM) grew 14%, as the telco endured margin erosion brought about by the NBN transition with a good performance from its corporate division and plans to launch a mobile service in Singapore later this year
- The value of the 50% interest in New Hope Corporation Limited (ASX: NHC) grew 32%, with the coal miner enjoying the tailwind of growing thermal coal prices sustained by strong demand in Asia
- The value of the 44% interest in Brickworks Limited (ASX: BKW) grew 8%, as the company managed to maintain earnings thanks to record sales of building products and despite the underperformance of its land development segment
Soul Patts raised its interim dividend 4.5% to 23 cents per share fully franked. This is the twentieth consecutive increase from the company, which prides itself on never having failed to pay a dividend since listing in 1903.
Foolish takeaway
Soul Patts currently trades at 15.5x earnings, which can be considered a good price for a company with a diversified portfolio that has outperformed the ASX in the long run and never missed a distribution to its shareholders. I'd recommend buying this stock and holding it for the long term.
