Why 'ASX dividend king' Soul Patts (ASX:SOL) is a top income share for 2021

ASX dividend king Washington H. Soul Pattinson & Co Ltd (ASX: SOL), or Soul Patts, is a top ASX dividend income share for 2021. Here's why

| More on:
Crown sitting on top of a pile of dividend cash

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The king of ASX dividend shares, Washington H. Soul Pattinson & Co Ltd (ASX: SOL) held its annual general meeting (AGM) this morning. I won't bore you with the nitty-gritty details, as they were comprehensively poured over by my Fool colleague Eddy Sunato earlier today.

But in a nutshell, Soul Patts reported some solid performances from its investment portfolio (especially from its holdings in the resources sector), as well as a 44% slide in net profits before tax.

But what really stands out is this company's dividend record.

You may have picked up that I described Soul Patts as the 'king of ASX dividend shares' earlier. That's because this company simply has the best record when it comes to paying dividends out of any company in the ASX's All Ordinaries Index (ASX: XAO).

That record was helpfully brought up at the AGM this morning.

An unbeatable dividend history

The company was happy to remind investors that it remains the only ASX company to have increased its dividend payments for a consecutive 20-year period. And yes, that does include 2020, a year which has been many ASX stalwarts slash their dividends, much to shareholders' dismay.

It's not just tokenistic annual increases either. Soul Patts's dividends in 2001 amounted to 11 cents a share. In 2020, they were 60 cents a share, which the company was pleased to tell us amounts to a compounded annual growth rate of 9.2% per annum (which handily outstrips inflation). In 2020 alone, the increase was a comfortable 3.4% on 2019's payouts.

This streak of dividend payments has benefitted shareholders over the past 2 decades. Soul Patts told us that the company's total shareholders returns (combining share price growth and dividends) have outperformed the All Ordinaries Accumulation Index (ASX: XAOA), which also includes growth and dividends, over 1, 5, 10, 15 and 20 years. On the last metric, Soul Patts has reportedly managed to return an average of 14.3% per year to investors. That outperforms the index's 8.1% average by 6.2% every year.

This 14.3% metric holds constant over the proceeding 20 years as well. The company also tells us that it has delivered an average of 14.4% per annum since 1980. That means a $1,000 investment in 1980, with dividends reinvested, would be worth $216,4760 today. Enough said.

Soul Patts' portfolio

Soul Patts is an industrial conglomerate. It owns a vast portfolio of underlying investments, which its management team runs on behalf of its shareholders. This portfolio consists of large stakes in a number of ASX shares, including Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC) and Australian Pharmaceutical Industries Ltd (ASX: API).

It also includes a collection of unlisted assets and private companies. These include Round Oak Minerals (a copper and zinc miner) and various properties such as retirement homes and farms.

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Dividend Shares

falling healthcare asx share price Mesoblast capital raising
⏸️ Dividend Shares

Sonic Healthcare (ASX:SHL) dividend rises 7%, share price falls after FY21 results

Triple digit profit growth and a solid dividend was not enough to impress investors on Monday.

Read more »

A smiling woman with a handful of $100 notes, indicating strong dividend payments
⏸️ Dividend Shares

The Adairs (ASX:ADH) dividend more than doubled in FY21

A record financial result will see a generous dividend paid out to Adairs shareholders.

Read more »

A businessman on a road raises his arms as dollar notes rain down on him.
⏸️ Dividend Shares

The Newcrest (ASX:NCM) dividend boosted 129%

Newcrest marks its sixth successive year of increasing dividend payments to shareholders

Read more »

Happy couple laughing while shopping in supermarket
52-Week Highs

August has been a great month so far for the Woolworths (ASX:WOW) share price

We take a look at how shares in the supermarket giant have been performing ahead of the company's full-year results

Read more »

wine glass full of coins
⏸️ Dividend Shares

The Treasury Wines (ASX:TWE) dividend bumped up by 60%

Here's how Treasury Wines dividends for FY21 have stacked up.

Read more »

Young boy cries and covers eyes with torn money on table
⏸️ Dividend Shares

The Origin (ASX:ORG) dividend has dropped 20%

What's happened to Origin's dividends?

Read more »

two people hold a sheet above their head while making a bed in a room featuring homewares.
Retail Shares

How did the Adairs (ASX:ADH) share price respond last earnings season?

The homewares retailer will be looking for another year like last year when it releases its FY21 earnings tomorrow.

Read more »

Two men excited to win online bet
Share Market News

Why the Tabcorp (ASX:TAH) dividend was boosted by 32%

The strong performance of Tabcorp's business will see a combined FY21 dividend of 14.5 cents.

Read more »