An ASX 200 dividend stock with a five or ten-year streak of raising their dividends is usually a good sign that you've found a quality income stock. But an ASX 200 dividend stock with a 20-year-plus streak? That's ASX dividend royalty.
That's exactly what the Washington H. Soul Pattinson Co Ltd (ASX: SOL) share price has on offer for income investors today.
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Why Soul Patts is a quality ASX 200 dividend stock
I already own Soul Patts shares – in fact, the company is one of my top ASX holdings. But I plan to add far more of this would-be ASX dividend aristocrat to my portfolio in 2023, if the pricing allows it.
I would go one step further and argue that if I had to own just one ASX 200 dividend stock in my portfolio, this would be it.
But let's backtrack a little and get into the weeds of what makes this company such a special ASX dividend share.
So Soul Patts is one of the oldest companies on the ASX 200. It first put down roots way back in 1872, but become the company we know today in 1903. Its first calling was pharmacies, but today, Soul Patts is a bit of a hard company to pigeonhole.
Its primary business is owning large stakes in other investments for the benefit of its shareholders. In this way, it arguably functions closer to a listed investment company (LIC) or a managed fund rather than the typical kinds of companies we see on the ASX.
Soul Patts invests prudently in a large and diversified portfolio of assets. These include a portfolio of blue-chip shares gained in the LIC Milton Corporation acquisition in 2021. But it also includes its large, strategic investments in a handful of ASX shares.
For example, Soul Patts owns 12.6% of TPG Telecom Ltd (ASX: TPG), 39.9% of New Hope Corporation Limited (ASX: NHC) and 43.3% of Brickworks Limited (ASX: BKW).
The company also owns a stable of unlisted assets, which includes assets ranging from industrial property to swim schools.
An ASX dividend aristocrat?
This diversified investment portfolio has given Soul Patts the unique distinction of being able to fund annual dividend increases every single year since the year 2000. That's throughout both the global financial crisis of 2007-2009, as well as the COVID pandemic.
This is an ASX dividend record unmatched on the ASX 200 or, indeed, on the entire ASX. It's the closest thing the ASX has to a United States-style 'dividend aristocrat', which is a US share that has increased its dividends every year for 25 years.
Back in December last year, Soul Patts announced during its annual general meeting that its total shareholder return (share price gains and dividends) came to an average of 12.5% per annum over the 20 years to 30 November 2022.
That was a good 3.4% per annum above what the ASX All Ordinaries Accumulation Index had achieved over the same period.
So, in conclusion, this is an ASX 200 dividend stock I will never own enough of. I can't wait to add to my position in 2023. If there's a compelling price point, I'll be loading the boat with this top-notch company.
