“Washington H Soul Pattinson & Co (SOL) is a defensive name that has evolved over the course of its 120-year history into an investment house with a diversified and uncorrelated portfolio of assets across pharmaceuticals, mining, building materials, property, communications, financial services and a variety of other equity investments including alternatives.
“We are adding Washington H Soul Pattinson & Co (SOL) to our best idea list,” Raymond said.
“What stands out with SOL is its long-term ability to compound its dividend, having grown its dividend at a compound annual growth rate of 9.6% over the last +20 years.
“Its current forecast yield is 3%.
“While in-built diversification across asset classes manages risk, SOL’s annualised total shareholder return (TSR) over the last 20 years has also outperformed, averaging 12.5% versus the All Ords accumulation index of 9%.
“SOL’s financial year 2023 result was broadly in line with expectations, and financial year 2024 is also set to benefit from a more diversified asset base (e.g., increased structured yield and PE allocations).
“Post some listed equity sales, the business has approximately A$911 million of cash and equivalents to take advantage of any potential volatility both in the listed and unlisted space.” Raymond said.
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