I think that Washington H. Soul Pattinson and Co. Ltd (ASX:SOL), AKA WHSP, is a great ASX dividend share.
If you haven’t heard of WHSP before, it’s a business that operates as an investment house. It has been listed since 1903, starting as a pharmacy, and has been diversifying its portfolio for decades.
Here are three reasons why it could be a really good ASX dividend share:
There are risks when it comes to businesses and the share market.
But diversification can be a useful strategy to mitigate individual company risk or industry risk.
The WHSP portfolio is spread across a variety of industries such as telecommunications, building products, resources, financial services, agriculture and so on.
It actually has a lot of different holdings in its portfolio of assets, but some are more notable such as: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Australian Pharmaceutical Industries Ltd (ASX: API), Bki Investment Co Ltd (ASX: BKI), Milton Corporation Limited (ASX: MLT), Pengana Capital Group Ltd (ASX: PCG), Pengana International Equities Ltd (ASX: PIA) and Tuas Ltd (ASX: TUA).
WHSP’s strong dividend record
A key reason to like WHSP as an ASX dividend share is its excellent and consistent dividend.
The business has grown its dividend per share to shareholders every year since 2000.
It has the longest dividend growth streak record of any ASX company. Dividends aren’t guaranteed, but WHSP has an objective of trying to grow the dividend for investors. It has been successful so far this century.
If an investor were relying on investment income, this is one of the shares I’d want to have in the portfolio.
Sometimes recessions can really cause difficulties for businesses. Dividends that were previously strong can suddenly sink. Just look at Transurban Group (ASX: TCL) and Sydney Airport Holdings Pty Ltd (ASX: SYD).
The businesses and assets in WHSP’s portfolio offer defensive earnings (and therefore perhaps dividends) to WHSP. Everyone needs telecommunications, so TPG is defensive. We all need food, so agriculture is pretty defensive (though volatile). Brickworks has a very solid dividend record, partly thanks to holding WHSP shares. And so on.
The business has defensive holdings, so WHSP itself is defensive. I think it’s one of the best ASX dividend shares around, the only downside is the relatively low fully franked dividend yield of 1.9%.