I’ll never sell this ASX dividend share. Here’s why

Looking for a bottom drawer ASX share? Here’s a company I would own forever…

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Key points

  • A 'set and forget' share portfolio can be a beautiful thing
  • But in our modern world, picking companies to last a lifetime can be a challenge
  • But here's my best bet on a bottom drawer ASX share

The legendary investor Warren Buffett once famously said that his favourite length of time to own a share is forever. It’s a sentiment that this writer agrees wholeheartedly with. But the world is a complex and ever-changing place. Thus, it’s hard to really know for sure if a company has a place in one’s portfolio forever.

In 1992, for example, Blockbuster Video might have seemed like a buy-and-hold-forever kind of company. Fast forward to the late 2000s and it was becoming clear that Blockbuster’s future was looking increasingly bleak.

Even Buffett doesn’t quite put his money where his mouth is all of the time. He has been selling plenty of his shares in recent years, after all.

But in my opinion, Washington H. Soul Pattinson and Co Ltd (ASX: SOL) is about as close as you can get to a ‘forever ASX share’. Here are two reasons why:

Soul Patts has been succeeding for decades

Soul Patts has been around for longer than the ASX has. It can trace its roots back to the 19th century. Over the decades since, the company has slowly transformed into an investment house of sorts. It conservatively manages its capital for the long-term benefit of its shareholders, a process it is continually refining.

But it has done a pretty decent job of building a long-term track record of performance. In a company presentation in March, Soul Patts claimed that its shares had averaged a compounded annual return of 14.5% since 1981. Not too many companies can boast a record of that length and calibre. What’s more, Soul Patts has also given its investors an annual dividend increase every year since 2000.

An unusually diversified ASX share

Most ASX shares are inherently undiversified since they represent ownership of a single business. But Soul Patts is different. It owns large chunks of many other ASX shares within its investment portfolio. These include telco TPG Telecom Ltd (ASX: TPG), coal miner New Hope Corporation Limited (ASX: NHC), and construction materials company Brickworks Ltd (ASX: BKW). What’s more, it also owns a bevvy of unlisted assets too, which further diversifies its portfolio.

So Soul Patts is a diversified investment with a long, long track record of delivering outperformance and rising dividends. That’s why I don’t ever plan on selling this ASX dividend share.

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in 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 Scott Phillips.

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