Choosing one ASX 200 share to hold forever is a big task. As we preach here at The Motley Fool, it’s never a good idea to confine your investment portfolio to just one share. There’s a lot of risk that comes with that. Not to mention forfeiting the famous ‘only free lunch of investing’, diversification.

But that doesn’t mean it’s not a constructive exercise. After all, the legendary investor Warren Buffett once offered this sage piece of advice:

I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it, so that you had 20 punches — representing all the investments that you got to make in a lifetime.

And once you’d punch through the card, you couldn’t make any more investments at all… you’d really have to think carefully about what you did, and you’d be forced to load up on what you really think about. So you’d do much better.

So what would be the one ASX share I would choose if I was given a ‘ticket with only one slot’?

Well, it would be a share I already happen to own: Washington H Soul Pattinson and Co Ltd (ASX: SOL).

Why I think Soul Patts is an ASX 200 forever share

This is for two compelling reasons. the first is this is a company that is more diversified than most. Soul Patts has a long history, having first opened up shop back in the 19th century. But these days, it is a long way from its pharmacy-running roots. It arguably functions more like a listed investment company (LIC) or a managed fund these days.

Soul Patts owns chunks of a variety of other ASX shares These include New Hope Corporation Limited (ASX: NHC) and TPG Telecom Ltd (ASX: TPG). As well as Brickworks Ltd (ASX: BKW) and Tuas Ltd (ASX: TUA).

So we have a coal miner, two telcos and a construction materials company. Already we see that Soul Patts has a highly diversified earnings base.

Adding to that is the massive portfolio of blue-chip ASX shares that Soul Patts acquired last year when it bought the old Milton Corporation.

It also has a burgeoning portfolio of unlisted assets too. These include Round Oak Metals, Ampcontrol, Aquatic Achievers Swim Schools and Ironbark Asset Management. Soul Patts also actively invests in pre-IPO emerging companies.

As such, I consider this share to be extremely well diversified. This makes up for the problematic situation of only owning one business.

Growth and dividends?

The second reason is this company’s long history of delivering for its shareholders. Since its founding, Soul Patts has proudly been run by the same family, which has significant skin in the game to boot.

But let’s get to the numbers.

So according to the company’s last half-year financial report, which was dropped back in January, Soul Patts investors have enjoyed total shareholders returns amounting to an average of 11% per annum over the past 15 years. That rises to 13% per annum over the past 20. Those returns smash the returns of the broader market.

Soul Patts is also the only ASX share that has rewarded its investors with an annual dividend pay rise every single year since 2000. The dividends typically come fully franked too.

So all in all, I think Soul Patts is a hands-down winner. As such, it would be my first and only pick if I was confined to just one ASX share for time immemorial.

The post If I had to own only one ASX 200 share forever, this would be it appeared first on The Motley Fool Australia.

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More reading

• ‘Good value’: Expert names 2 ASX dividend shares to pounce on next dip
• Why is ASX behemoth Soul Patts lending a hand to Electro Optic Systems?
• Why this ASX 200 share could be a great way to indirectly profit from booming coal prices
• How I’d invest $50,000 in ASX dividend shares for retirement, if I had to start from scratch
• How I’d invest $20,000 in ASX shares today if I had to start from scratch

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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