Washington H. Soul Pattinson and Co Ltd (ASX: SOL), or WHSP, shares are likely to be my next investment.
The last 12 months have been a great time to own ASX shares thanks to the strong gains we’ve seen for a wide range of companies.
In this situation, WHSP shares make a lot of sense to me. I like to invest regularly in the share market, but many share prices seem to have gotten ahead of themselves.
Strong portfolio
WHSP is an investment conglomerate which owns a portfolio of ASX shares of other assets that are largely defensive and provide good cash flow.
Its larger investments include New Hope Corporation Ltd (ASX: NHC), TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Macquarie Group Ltd (ASX: MQG), Tuas Ltd (ASX: TUA) and Commonwealth Bank of Australia (ASX: CBA).
Some non-shares assets include agriculture, bonds, swimming schools, financial services, retirement living and property.
None of these assets strike me as materially more risky than the economy as a whole. I believe they can offer uncorrelated returns for WHSP shares.
Long-term investments
The business is very willing to make long-term investments in businesses, which in turn makes WHSP a solid long-term idea.
Its New Hope, TPG and Brickworks investments have been held for decades, and they’re providing appealing dividend income.
I’m not sure what the next TPG is going to be, though Tuas is growing very well in Singapore. That would be my best guess at the next investment that becomes a major holding.
I expect it has made a number of investments in the last few years which could be held for a long time.
Holding onto these investments for such a long time also means the business is avoiding capital gains tax if those investments were to be sold.
Solid, growing dividend
In this period of higher inflation, it’s good to own businesses that are regularly growing their payouts.
WHSP has grown its yearly dividend every year for the past 24 years. This is the longest streak on the ASX. Owning WHSP shares is a very fulfilling financial experience because it provides diversification, long-term capital growth and steady dividend growth.
While I do already own shares, I want to buy more, and it looks like a fair price today.
