Soul Patts dividend creates new 24-year record!

It was yet another dividend increase from the investment house.

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Excited woman holding out $100 notes, symbolising dividends.

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Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) just reported its FY24 first-half result, which included another Soul Patts dividend increase.

A dividend isn't guaranteed, it's decided by the board of directors, with reference to how much profit the company has made.

Another payout increase

The company decided to increase its interim dividend by 11.1% to 40 cents per share.

That means the ordinary interim and final dividend have increased for 24 consecutive years at a compound annual growth rate (CAGR) of 9.6%.

The board of directors considers net cash flow from its investments when setting dividends. In HY24, the business saw net cash flow from investments grow by 6.9% to $263.4 million.

In per-share terms, the company made 73 cents of net cash flow from investments. This translates to a dividend payout ratio of cash flow of 54.8%. It is keeping a large percentage of the money within the business, which can help make future investments and generate more cash flow.

The leadership team of Soul Pattinson said:

Soul Patts has an exceptional track record of paying dividends to shareholders, supported by a diversified mix of investments and our long-term focus on cash generation.

Soul Patts dividend details

The company's 40 cents per share fully franked dividend is going to be paid on 10 May 2024.

To be eligible to receive this dividend, investors need to own Soul Patts shares before the ex-dividend date, which is 17 April 2024 – that's less than a month away.

At the current Soul Pattinson share price, the upcoming dividend represents a cash dividend yield of 1.1% and a grossed-up dividend yield of 1.6%.

What next for the company?

The investment house gave some encouraging comments about the future direction of the Soul Patts dividend payments:

We are focused on delivering long-term capital and income growth directly to shareholders through sustainable growth in dividends and our share price. Long-term total shareholder returns generated by Soul Patts over 10, 15 and 20-year periods have outperformed the All Ordinaries Accumulation Index (ASX: XAOA) by 3.1%, 2.9%, and 3.5% per annum, respectively.

Soul Patts remains well positioned with a diversified and uncorrelated portfolio of assets designed to produce cash flows over the long-term. Our unconstrained mandate to invest in any sized business, any industry, using any type of capital means we can aim to respond to market conditions and reduce the volatility of earnings longer-term.

The last two declared dividends amount to 91 cents per share, which is a cash yield of 2.6% and a grossed-up dividend yield of 3.7%.

Motley Fool contributor Tristan Harrison 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 Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended 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 Scott Phillips.

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