Soul Pattinson (ASX:SOL) share price wobbles as company touts track record

The investment company has just released its 2021 annual report. We take a closer look

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The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) or ‘Soul Pattinson’ share price is seesawing on Tuesday.

In early afternoon trade, the diversified investment company’s shares are being exchanged for $34.18 apiece — representing a fall of 0.03%. Earlier in the day, its shares were as high as $34.99. More than $16.6 million worth of Soul Patts shares has been traded so far today.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is 0.16% in the green, now fetching 7,452.8 points.

Although not price-sensitive, there is an announcement that investors might be reading into today from Soul Patts. Prior to the market opening, the iconic investment powerhouse released its 2021 annual report.

Let’s peer into some of the highlights.

What’s moving the Soul Pattinson share price?

Standing the test of time

The last 12 to 18 months have been eventful for Soul Pattinson and its share price. A multitude of developments in the company’s investment holdings has played out during this time.

These include the merger of TPG and Vodafone, forming TPG Telecom Ltd (ASX: TPG); Soul Patts’ own merger with Milton; a booming property market — helping its Brickworks Limited (ASX: BKW) investment; and rising thermal coal prices — boosting its value in New Hope Corporation Limited (ASX: NHC).

As a result, the Soul Pattinson share price has fared exceptionally well over the past year, despite the impacts imposed by COVID-19. Perhaps this demonstrates quite clearly the benefit of diversification during turbulent times.

In its annual report for 2021, the company was quick to point out its history of delivering impressive returns for shareholders over the years. In fact, the chair Robert Millner highlighted that the company’s objective is to provide superior returns to its shareholders by creating capital growth along with steadily increasing dividends over the long term.

Well, it appears the company has come good on that objective over the past 40 years. According to the report, $1,000 invested in 1981 with dividends reinvested would now be worth $239,132 — a compound annual return of 14.7%.

Additionally, over the past 20 years, the Soul Pattinson share price has delivered a total shareholder return of 1,140%. Meanwhile, the All Ordinaries Total Accumulation Index (ASX: XAOA) has increased by 429% during the same period. The extensive positive track record is hard to argue with.

Looking to the future

In its report, Soul Patts shared the outlook for various companies that it holds a stake in. Across the board, the investment company is quite positive on most of its holdings in the short term.

For instance, it believes TPG is now in a strong position to be a fierce competitor in the Australian telecommunications sector. Likewise, thermal coal pricing forecasts indicate further strength, boding well for its New Hope holding.

However, the Soul Pattinson share price might be weighed on in the short term from uncertainty in the building products business of Brickworks. Although, the company remains optimistic that pressures will alleviate with the continued rollout of vaccinations.

Should you invest $1,000 in Soul Pattinson right now?

Before you consider Soul Pattinson, you'll want to hear this.

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*Returns as of August 16th 2021

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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