The debate between Washington H. Soul Pattinson & Co Ltd (ASX: SOL) and Brickworks Ltd (ASX: BKW) shares have kicked off here at Fool central, having sparked interest among investors seeking value in 2025.
Both companies are well-established blue-chip stocks with diverse portfolios. But the key question remains: Which one represents the better value at this point in time?
Let's dive in and see what the experts –and the data – have to say.
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Are Brickworks shares a buy?
Brickworks is primarily known for its building materials division. In a market dominated by global uncertainty, the stock has shown some resilience due to its diversified business model.
With the benchmark S&P/ASX 200 Index (ASX: XJO) up less than 2% this year after an 8% rise this past month, Brickworks shares have lifted 12% in the past month and held an 8% gain this year.
Apart from its brick manufacturing business, the company also has exposure to industrial property developments in the United States.
Bell Potter analysts rate Brickworks a buy as of April, setting a target price of $32 apiece. This reflects 14% potential upside from its price of $27.66 at the time of writing.
It also sells at a price-to-earnings ratio (P/E) of 11x, meaning it is valued at 11 times net profit, or $11 for every $1 in earnings.
In my view, investors looking for capital growth alongside reliable dividend income might be drawn to the name.
Soul Patts: Diversified conglomerate
On the other hand, Washington H. Soul Pattinson (I'll just call it Soul Patts from here on) provides exposure to a wide array of industries.
As a diversified investment conglomerate, that means Soul Patts holds stakes in several prominent ASX companies.
Some of these include coal miner New Hope Corporation Ltd (ASX: NHC), telecom giant TPG Telecom Ltd (ASX: TPG), and Macquarie Group Ltd (ASX: MQG).
And just like Brickworks shares, Soul Patts shares have outperformed the index and are up nearly 9% this year.
Soul Patts has a strong reputation for dividend growth. As my colleague Tristan covered, it has increased its annual payout every year since 2000. That's nearly 25 years.
The company currently pays a dividend yield of about 2.7%, excluding any franking credits. It is also rated a buy from the consensus of analyst opinions, according to CommSec.
Despite its solid dividend history and broad asset base, the consensus target price for Soul Patts is $36.20 according to Tradingview, slightly below its current share price of $37.21.
It also trades at a higher P/E ratio of 26x, meaning investor expectations are high for this 120-year-old giant.
That said, you're paying a premium vs. Brickworks in this instance.
Final Takeaway
When comparing the two stocks, the most glaring difference is their valuation.
Brickworks' current P/E ratio is 11x, compared to Soul Patts' significantly higher P/E ratio of 26x. Considering all the facts, I believe Brickworks is worth a closer look for investors seeking value.
The interesting point in this debate is that both companies, Brickworks and Soul Patts, respectively, own sizeable stakes in one another.
Soul Patts owns around 40% of its counterpart, whereas Brickworks owns 26%. So, you're getting exposure to both names by owning either company anyway.
Ultimately, your choice between these two blue-chip stocks will depend on your personal investment goals, risk tolerance, and time horizon.
