The S&P/ASX 200 Index (ASX: XJO) is a wonderful place to find passive income opportunities. There's a great ASX 200 dividend stock I want to highlight for incredibly reliable and consistent dividends. That name is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), an investment house.
The business is one of the oldest on the ASX, it has been listed for more than 120 years.
It has a great history – the business started as a pharmacy business, but this has expanded into numerous sectors and asset classes through numerous investments.
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Incredibly reliable ASX 200 dividend stock
The business pays for its dividend from the net cash flow from its investments (NCFI), after paying for its own operating expenses.
Therefore, growth of the net cash flow is the key metric to look at when judging how well this company can fund its growing dividend.
Dividend growth has been wonderfully consistent. The business has hiked its annual regular dividend every year since FY98 – 28 years of payout growth!
In terms of the consecutive years of dividend growth, that's the best record on the ASX!
The FY26 half-year result saw the business report 15.4% growth of NCFI to $334 million. On a per-share basis, NCFI rose to 89 cents.
In the HY26 period, it hiked its interim dividend by 9.1% to 48 cents per share.
Pleasingly, the dividend has grown at a compound annual growth rate (CAGR) of 11.9% over the last five years.
The payout is growing at a great pace, it's not just a slow-moving dividend.
On top of all of the above, the ASX 200 dividend stock has paid a dividend for 123 consecutive years. That's a great reliability record too.
But, its dividend yield isn't that high because it has a relatively low (and sustainable) dividend payout ratio. However, that helps future dividend growth. Its last two dividends equate to a grossed-up dividend yield of 3.6%, including franking credits.
But, if it were to grow its next two dividends by another 9%, for example, then its upcoming grossed-up dividend yield would be around 4%, including franking credits, at the time of writing.
If someone were to invest $1,000 into Soul Patts shares today, they could buy 23 shares with a little bit of change left over.
Great portfolio
Of course, we shouldn't invest in an ASX 200 dividend stock just for the passive income or without knowing what it does.
Soul Patts is invested in a number of sectors such as resources, energy, telecommunications, building products, industrial properties, financial services, retirement living, swimming schools, agriculture, credit and plenty more.
I love that the business generates its returns from a variety of sources. That means its cash flow is diversified, and it can hunt across a wide spectrum of industries for ideas.
I've made this company my largest holding because of everything it has to offer investors wanting a mixture of passive income and capital growth.
