One of the best performing S&P/ASX 200 Index (ASX: XJO) shares today is Brickworks Limited (ASX: BKW). Brickworks shares are, at the time of writing, up a healthy (and mathematically pleasing) 3.69% to $21.06 a share. That makes brickwork the second-best performing ASX 200 share on the market today, just behind QBE Insurance Group Ltd (ASX: QBE). It also puts the Brickworks share price within a whisker of the company's 52-week (and all-time) high of $21.29.
So who is Brickworks? And why is the Brickworks share price climbing so decisively today?
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Working bricks
Brickworks is one of the oldest businesses on the ASX. It was founded way back in 1934, and it has been an ASX-listed company since 1960.
As its name implies, Brickworks is a manufacturer of building materials. These include (naturally) bricks, as well as pavers, cement, roofing products and masonry. Some of its brands include AustralPrecast, Bowral Bricks, Terracade and UrbanStone. Its primary market for building materials is Australia. But it has also been expanding into the United States, particularly after its 2018 acquisition of the US company Glen-Gery.
However, building materials are not the only area Brickworks trades in. The company also has a moderate property portfolio. The properties Brickworks owns are usually rezoned from old industrial uses within the business and redeveloped into long-term assets. Brickworks tells us that it aims to be "creating a stable, growing annuity style income stream" in doing this.
Brickworks also has a substantial portfolio of ASX share investments too. This consists mostly of a large chunk of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares (representing 29.4% of the entire company). Soul Patts itself has a large portfolio of ASX shares of its own, which, rather perplexingly, consists of a large chunk of Brickworks shares as well. This is an arrangement that has been grandfathered as a result of a deal in the 1980s. But Soul Patts also owns a significant share of other ASX companies, including TPG Telecom Ltd (ASX: TPM) and New Hope Corporation Limited (ASX: NHC). Brickworks has exposure to a reasonable diverse ASX hiding as a result.
Why are Brickworks shares rising today?
Well, there's no official reason why Brickworks' shares should be rising today. There are no major news or announcements out of the company since 3 May. And that was just some routine paperwork.
However, back on 25 March, Brickworks delivered its half-year earnings report for the 6 months ending 31 January 2021. This was well-received by investors, who sent the Brickworks share price up more than 2.5% after its release. Although Brickworks reported a net underlying profit fall of 10%, it also reported a statutory net profit of $71 million, which was a 22% increase over the previous corresponding period.
Importantly, Brickworks also raised its dividend by 5% to 21 cents per share. Brickworks is a rather special ASX dividend company. It has managed to either hold steady or increase its dividend every year since 1976. That's a pretty impressive 45-year streak. Incidentally, Soul Patts is the holder of the ASX's best dividend growth record. It's delivered an increasing dividend every year since 2000. Brickworks doesn't quite match that, but it has inarguably looked after its shareholders in the income department all the same.
On the current Brickworks share price, this dividend is worth a trailing yield of 2.85%.
It's probably a culmination of these factors that are getting investors hot under the collar for Brickworks shares today.
