Is Soul Patts (ASX:SOL) the best ASX dividend share?

Soul Patts may be one of the leading ASX dividend shares to think about.
The post Is Soul Patts (ASX:SOL) the best ASX dividend share? appeared first on The Motley Fool Australia. –

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) (Soul Patts) could be one of the best ASX dividend shares to consider for income investors.

The business is actually one of the oldest on the ASX. It has been listed since 1903. That means it has survived through various events like world war one, the Spanish Flu, the Great Depression, the second world war, the GFC and so on.

For a few different reasons, Soul Patts could be one or the leading ASX dividend shares:

Defensive and diversified portfolio of assets

One of the elements of a sustainable dividend is that the dividend payment is less than the cashflow or profit. If a business pays more than 100% of its profit then it makes it a bit harder to grow the business when there is no profit re-investment happening.

If the profit is consistent and reliable then Soul Patts can also be confident in its dividend being sustainably funded.

Soul Patts has a number of assets that are defensive or relatively uncorrelated to the performance of the broader Australian economy such as telecommunications, property, resources, agriculture, swimming schools and so on.

The ASX dividend share has a wide array of ASX shares in its portfolio including TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Bki Investment Co Ltd (ASX: BKI), Pengana International Equities Ltd (ASX: PIA), Pengana Capital Group Ltd (ASX: PCG), New Hope Corporation Limited (ASX: NHC) and so on.

Commitment to growing dividends

If management tell investors about a goal that is a key objective for the business, then that suggests the company will make it a priority to try to attain that goal.

Soul Patts has regularly said that it’s aiming to keep growing the dividend for shareholders.

The ASX dividend share has grown its dividend every year since 2000. It currently holds the record for consecutive annual dividend increases. It has also paid a dividend every year since listing in 1903, though not every year was growth.

Portfolio rejuvenation

One of the ways that Soul Patts has managed to stay relevant over the last century is the ongoing portfolio investments and adjustments that the investment conglomerate makes.

The business has regularly changed its investments to what it thinks are long-term opportunities.

For example, it recently divested its long-term holding of Australian Pharmaceutical Industries Ltd (ASX: API) and also bought the old listed investment company (LIC) Milton to increase its financial fire-power.

The ASX dividend share is now looking at a number of areas to invest including international shares, private equity, structured yield, emerging companies, health and ageing, the energy transition, agriculture, financial services and education.

Is the Soul Patts share price good value?

The broker Morgans currently rates the investment conglomerate as a hold, though the price target is $36.78.

Based on the Morgans’ estimates for FY23, Soul Patts is valued at 31x FY23’s estimated earnings.

The post Is Soul Patts (ASX:SOL) the best ASX dividend share? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Soul Patts right now?

Before you consider Soul Patts, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Soul Patts wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why is the Soul Pattinson (ASX:SOL) share price sliding lower today?

Is the Wesfarmers (ASX:WES) share price great value or overvalued?

Soul Patts (ASX:SOL) share price in focus as Round Oak IPO scrapped

Why is the Washington H. Soul Pattinson (ASX:SOL) share price struggling in November?

Why API, Evolution, Flight Centre, and Sydney Airport shares are pushing higher

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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