Like most ASX investors, I have a diversified portfolio of shares, both Australian and international. This portfolio includes many quality companies, many of which I've written extensively about in the past.
Having such a wide range of different companies to choose from, both on the ASX and on international markets, is a blessing. However, if I were to be forced to pick just one share on the ASX to invest in, there's no doubt in mind as to which company I would go with.
It would be none other than Washington H. Soul Pattinson and Co Ltd (ASX: SOL).
I've written about Soul Patts many times before. It is an ASX investing house that has been listed on our markets for more than a century. Over this time, it has built a reputation for being a prudent manager of investor capital with an unwavering eye on the long term.
So why would I pick Soul Patts over any other share on the ASX if I had to pick just one?
Well, there are two reasons.
Why I would pick Soul Patts as my one ASX stock
This ASX stock is already diversified
One of the largest risks one would take in just investing in a single ASX share is diversification. If you buy a bank like Commonwealth Bank of Australia (ASX: CBA), you would be highly exposed to any risks in the banking sector. Similarly, if you went for BHP Group Ltd (ASX: BHP), you would probably be kept up at night by fears about what the iron ore market might do next.
Not so much with Soul Patts. Investing in this company means investing in a highly diversified portfolio of underlying investments.
Soul Patts owns a vast array of different investments. Its core holding is a 'strategic portfolio' consisting of large stakes in a handful of other ASX shares. These include Brickworks Ltd (ASX: BKW), TPG Telecom Ltd (ASX: TPG), and New Hope Corporation Ltd (ASX: NHC). But the company also owns a portfolio of dozens of blue-chip shares in its 'large-caps portfolio', which helps balance out this concentration.
In addition to these investments in ASX shares, Soul Patts has operations covering other asset classes, including private credit, venture capital, and unlisted property.
Decades of top performance
Diversification is all well and good, but it doesn't mean much if Soul Patts can't bring home the bacon at the end of the day. Fortunately, this company has proven, over many decades, to be quite adept at finding said bacon.
For one, Soul Patts currently holds the record for the longest streak of annual dividend increases on the ASX. That would be 25 years and counting. A company cannot achieve a feat like that without being of high calibre.
For another, the company's overall returns have been market-crushing. Last month, Soul Patts revealed that its shareholders have enjoyed an average return (share price growth plus dividends) of 13% per annum over the 25 years to 31 January 2025. That runs rings around the broader market's 8.5% average.
With numbers like that, as well as the built-in diversification we've just discussed, it's easy to make the case for Soul Patts to be a 'one and done' stock if I had to choose.
