I think Warren Buffett is one of the world's best investors. There are some wonderful ASX dividend shares he'd like in my opinion.
Warren Buffett's Berkshire Hathaway is one of the world's largest businesses. Mr Buffett likes to stick to investing in businesses that he understands. I think these two ASX shares are really good Warren Buffett options:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is the business that's most comparable to Berkshire Hathaway in Australia.
It is an investment conglomerate. It has both listed and unlisted business investments, just like Berkshire Hathaway.
The ASX shares that Soul Patts is invested in includes TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC), Australian Pharmaceutical Industries Ltd (ASX: API), Clover Corporation Limited (ASX: CLV), Milton Corporation Limited (ASX: MLT) and Bki Investment Co Ltd (ASX: BKI).
It's also invested in various unlisted industries like financial services, resources, agriculture and swimming schools. Soul Patts is invested in private businesses like Ampcontrol, Seven Mile Coffee Roasters and Dimeo.
This ASX share is a lot older than Warren Buffett's Berkshire Hathaway. It has been listed since 1903, so it has shown it has great staying power.
It has grown its dividend ever year since 2000, including through COVID-19. That's the best dividend growth record on the ASX. This is one of the main reasons why I think Soul Patts is such a good dividend. A dividend certainly isn't guaranteed, but it's very reassuring to know that your investment is very likely to grow the dividend in the next financial year.
Soul Patts has built a substantial profit reserve and franking credits balance. It will be able to continue pay growing dividends for the foreseeable future.
At the current Soul Patts share price it offers a grossed-up dividend yield of 3.4%.
Brickworks Limited (ASX: BKW)
Brickworks is another ASX dividend share that I think Warren Buffett would really like.
Berkshire Hathaway has a house building division called Clayton Homes, so I think that Brickworks is close enough to Clayton that Mr Buffett wouldn't be put off by Brickworks.
I really like how long-term focused Brickworks is. It aims to be the market leader in the bricks market. It is the leading bricks business in Australia as well as the north east of the US. In Australia, Brickworks also sells a number of other building products including masonry, paving, roofing and precast.
Brickworks actually owns around 40% of Soul Patts. So it receives a reliable and growing stream of dividends from the investment conglomerate. The Soul Patts dividends and earnings have helped Brickworks to be a stable business over the previous decades, particularly during the lull periods for the construction industry.
Another pillar that Brickworks is building effectively is its property segment. It owns half of an industrial property trust along with Goodman Group (ASX: GMG). This property trust is seeing steadily-growing valuations of the property and rising net rental income. The trust recently secured a lease pre-commitment for 20 years with Amazon at the Oakdale West Estate in Western Sydney. It also has an agreement with Coles Group Limited (ASX: COL).
Brickworks hasn't cut its dividend for over 40 years. In other words, for more than four decades it has maintained or grown its dividend each year. That's a great record for an ASX dividend share.
At the current Brickworks share price it offers a grossed-up dividend yield of 4.8%. It's also trading at 17x FY21's estimated earnings.
Foolish takeaway
I think Warren Buffett would like both of these ASX dividend shares. I know I do. That's why Soul Patts is one of the biggest ASX shares in my portfolio. I really like the defensive nature of it. It's likely to be something that I'm still holding in 20 or 30 years.
