Anyone who buys an Australian stock does so with the hope and expectation that the companies in which they purchase an ownership stake will compound and build their wealth over time.
There are many ASX shares on our market, and most, though not all, should rise in value over time. But only a handful of ASX shares out there have displayed an ability to compound their owners' wealth by multiples in just a few years.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL) is one of those Australian stocks.
Washington H. Soul Pattinson, or Soul Patts for short, is an investing house that has been on the ASX boards for more than a century. It is not your traditional company. Soul Patts functions as an investing house, managing a portfolio of underlying assets on behalf of its shareholders.
These assets include huge chunks of a few other ASX shares, such as New Hope Corporation Ltd (ASX: NHC) and TPG Telecom Ltd (ASX: TPG). That's in addition to a broader portfolio of blue-chip stocks, unlisted assets, and other diverse investments.
By the end of the month, it will also officially include the construction material manufacturing and property assets of Brickworks Ltd (ASX: BKW), which is currently in the process of merging with Soul Patts.
So already, we can see this is a highly diversified Australian stock.
But let's talk returns.
How can this Australian stock turn $1,000 into $10,000?
Back in June, Soul Patts informed investors that its shares had returned an average of 11.2% per annum (share price gains plus dividends) over the preceding 25 years. In cumulative terms, that's 2,055%. This figure beats the pants off the broader Australian stock market, which returned 682% over the same period. Past performance is never a guarantee of future returns, of course. But that's still a fairly convincing track record.
Soul Patts' unrivalled dividend prowess also supports it. This Australian stock has increased its annual dividend every single year since 1998, including in 2025. That has done much of the heavy lifting in the compounding that long-term investors have enjoyed – provided they reinvested those dividends, of course.
If Soul Patts does continue to deliver these kinds of returns, investors can expect to turn every $1,000 invested into just over $10,000 over a 21-year span. That's enough to build a phenomenal amount of wealth if an investor has that kind of investing horizon, and could even fund a very comfortable early retirement. Investors could do far worse.
