Washington H Soul Pattinson & Co. Ltd (ASX: SOL) invests in coal mining, pharmaceuticals, telecommunications and building materials. Often referred to as Australia’s Berkshire Hathaway Equivalent, Soul Patts has been a portfolio stalwart for many investors.
In the last 15 years, Soul Pattinson has returned shareholders an average of 12.8% per year compared to the 8.9% per year from the All Ordinaries Accumulation Index.
In the last ten years, Soul Patts has earned $7.55 per share whilst paying $4.68 in fully franked dividends. As such, Soul Patts has retained $2.87 in earnings and has increased book value per share from $6.58 to $13.61
Based on these figures, Soul Patts has turned $2.87 in retained earnings into $7.03 book value growth. This is largely due to the growth of Soul Patts larger holdings, TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW) and New Hope Corporation (ASX: NHC)
Soul Patts has a market capitalisation of $4.71 billion and a P/E ratio of 14.9. Simply put, the historical financial performance and current price tag of this company makes it a very attractive option for investors.
Soul Patts is expected to increase its dividend to $0.58c in FY 2019.
The reality is, Washington H Soul Pattinson & Company knows what its doing. They are seasoned investors with a track record of success. For that reason, it is without question that this business is a must consider for every investor.
However, is the current price tag worth it?
Timing the market and predicting corrections is a futile activity. Ultimately, you are purchasing a company with a cheaper P/E ratio than most, one that will provide you just under a 3% dividend yield and a sound investment approach via its strategies.
Whilst the share price may fluctuate in the short term, I expect Washington H Soul Pattinson & Company to continue compounding returns and delivering great results for shareholders.
One of our investors has recently returned from a research trip to Silicon Valley... and has a warning for fellow investors:
Because he works for an organization dedicated to spreading great investing ideas, his video report is free today... so you can see it and decide for yourself.
Don't miss your chance click here to learn about this warning and how you might be able to profit!