The ASX dividend stock Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has an incredible record when it comes to consecutive annual dividend growth. Its regular dividend has been hiked every year since 1998!
That dividend record is so old it's almost a millennial! That's impressive.
Think of all the things in that time that could have caused the business to stop its consistent dividend growth.
There was the dotcom bubble bursting 26 years ago.
The GFC in 2008 and 2009 was a huge financial crunch, but the Soul Patts dividend kept increasing.
The COVID-19 impacts were widespread in 2020, yet the Soul Patts payout continued to grow.
High levels of inflation meant plenty of ASX dividend stock's streaks ended somewhere between 2022 to 2024, but Soul Patts' payment increased year after year.
The latest result was the FY26 half-year result, where the interim dividend was hiked by 9.1% to 48 cents per share.
In my view, the business can continue increasing its dividend for many years to come because of a few key factors.
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Sustainable dividend payout ratio
The investment house pays out a majority of its cash flow as a dividend each year, but it's not like it's paying out an extremely high figure like 98% of its earnings each year.
Each year, it's retaining a significant portion of its cash flow so that it can invest in new opportunities and there's room in the dividend payout ratio for the business to not achieve profit growth and still sustainably hike its dividend for multiple years before reaching a 100% dividend payout ratio.
In the FY26 half-year result, the business reported that its interim dividend was just 54.6% of net cash flow from investments, which I'd call extremely healthy.
Why I expect further payout growth from the ASX dividend stock
Soul Patts has invested in a variety of businesses and industries that generate defensive cash flow. These investments largely have good growth potential too. It can perform in all conditions.
Some of its larger investments include industrial property, swimming schools, telecommunications, 'emerging companies', electrification, agriculture, water entitlements and plenty more.
Over time, Soul Patts' investment portfolio steadily changes to be future-focused. For example, it recently sold down its TPG Telecom Ltd (ASX: TPG) position. Time will tell where it re-invests that money.
What I do know is that Soul Patts is looking internationally for opportunities, expanding its horizon to find the best ideas. Additionally, the company is staying aware of AI risks, which is good considering the level of disruption that could occur in the coming years.
With the ASX dividend stock deliberately pursuing private business investments, I think it's a great option to own for the long-term, offering something quite different to the overall ASX share market.
