Certain ASX dividend stocks can be incredible choices for Australians who are entering retirement. But not many dividend-paying businesses have reputations for delivering solid capital growth.
I want to tell you about a business that could deliver excellent growth over the next few years.
With the business I'll tell you about, it's already a major slice of my nest egg. It accounts for more than 25% of my portfolio due to my confidence in the business and the dividend credentials it has already demonstrated.
Let's dive into why I view it as such a good option.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
I don't think of Soul Patts as just one business, but a portfolio of assets.
It's a conglomerate with investments across a range of sectors, including telecommunications, resources, industrial properties, building products, agriculture, swimming schools, electrification, financial services, credit, and many more.
I think it's a leading investment considering the diversification it instantly offers when buying shares. Additionally, the business has considerable flexibility to pursue investment opportunities in any area it believes will yield the best results for its shareholders.
I'm comfortable having a significant portion of my portfolio in this business due to the wide variety of assets it owns.
Notably, the ASX dividend stock has increased its annual dividend per share every year since 1998, establishing the longest-running dividend growth record on the ASX. It's not guaranteed to continue, but its defensive portfolio and regular investments could help boost the cash flow for Soul Patts to pay larger dividends.
I want a very high degree of confidence that the dividend payments will continue flowing in all economic conditions. Hence, the stock's dividend record makes it a great option for people in retirement
Capital growth
I also think it's a great option for long-term capital growth, helping to build towards retirement. Its investment portfolio can organically increase in value as it delivers on its growth plans. Plus, it can make more investments.
Each year, the company receives cash flow from its portfolio. After covering its expenses and paying a higher dividend, the ASX dividend stock retains some cash flow to invest in further opportunities and expand its portfolio.
In the 25 years to 23 September 2025, the ASX dividend stock delivered an average total shareholder return of 13.7% per year, outperforming the S&P/ASX 200 Index (ASX: XJO) return, including dividends reinvested, by an average of around 5% per year.
I expect further long-term growth, and therefore I still believe it's a great long-term investment today.
