The Brickworks (ASX:BKW) share price just hit another all-time high

We take a look at what could be pushing Brickworks shares into record territory again

| More on:
Ecstatic worker in suit and hard hat talking on phone

Image source: Getty Images

Winners keep on winning… That sentiment might be going around today after shares in one of the ASX’s oldest companies –  Brickworks Ltd (ASX: BKW) – hit a new all-time high this morning.

The Brickworks share price started out at $25 today, but climbed to a new mark of $25.64 soon after open. At the time of writing, the price has partially retreated to $25.45, still a gain of 1.07% on yesterday’s close.

However, today’s record is just the latest notch in what is starting to become a whittled down bedpost. Shares in the 87-year-old company hit what was then a new high of $20.65 back in January 2020, just before the COVID-19 pandemic hit.

It took until October last year for the company to reclaim that level after the 2020 market crash. But since then, it’s been onwards and upwards for Brickworks shares. The company, on today’s pricing, is now up 30% year to date, 61% over the past 12 months, and 74% over the past 5 years.

We take a look at what could have been driving the Brickworks share price higher.

What’s behind the rise in the Brickworks share price?

Well, a big driver behind Brickworks’ most recent leg of share-price performance was the update the company gave investors last month.

In this update, the company informed the markets it had added a $100 million boost to its profits as the result of a revaluation of some of its property assets. As such, Brickworks said it now expected to deliver record earnings from its property portfolio for FY21, with property earnings before interest and tax (EBIT) in the range of $240 million to $260 million, up from $129 million a year ago.

Brickworks isn’t only in the business of making bricks and other construction materials. It uses land from its old production sites as property assets. This is an approach that has evidently worked especially well over the past year or so.

However, there is another reason why the Brickworks share price might have reached a new high today. That is the performance of its unofficial ‘sister’ company Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). I say sister company because Soul Patts and Brickworks have a rather unusual ASX relationship. Brickworks owns a large chunk of Soul Patts shares, 39.4% of the entire company in fact. But Soul Patts also owns a large share of Brickworks (43.9% of all shares). As such, the fortunes of these two companies are very much intertwined.

Soul Patts also hit a new all-time high today. Just after market open, Soul Patts shares topped out at a new record of $34.52 a share. This mutually beneficial situation for both companies could be feeding into the Brickworks share price as well today.

Brickworks has a market capitalisation of $3.84 billion, and a trailing dividend yield of 2.37%.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Record Highs