Soul Patts vs BHP: Which ASX share is best for beginners?

Washington H Soul Pattinson vs BHP Group shares: which is better for beginners?

Looking to start your investing journey but not sure which ASX giant is a better fit? Washington H Soul Pattinson and Co Ltd (ASX: SOL) and BHP Group Ltd (ASX: BHP) are both popular with Aussie investors, but their profiles couldn’t be more different. Let’s dig into how these two stack up and which might be a smoother way in for share market newcomers.

The case for Washington H Soul Pattinson and Co

Washington H Soul Pattinson (“Soul Patts”) is one of Australia’s oldest listed investment companies, having started out in pharmacies but now a diversified investment house. Its portfolio covers listed stocks (including big stakes in businesses like TPG Telecom and New Hope), private companies, real assets, and more. After merging with Brickworks in 2025, Brickworks is now part of the group, further boosting its diversification. Soul Patts has a reputation for steady returns and aims to deliver both capital growth and reliably increasing dividends.

Looking at the fundamentals, I think Soul Patts stands out with:

• A low P/E ratio of 7.03 – making it look attractively priced compared to the wider market and (as we’ll see) BHP
• A franked dividend yield of 2.37%, not massive, but backed by a long and consistent history
• A YTD return of 22.7%, showing robust capital gains recently

And for those who like fully franked income, every dividend here is 100% franked—a plus for Aussie investors focused on after-tax returns.

The case for BHP

BHP is a global mining powerhouse, best known for producing iron ore, copper, coal and other commodities. It’s not just the biggest ASX stock by market cap, but also a name synonymous with resources investing. BHP’s profits—and share price—are tied pretty closely to global commodity prices, so it’s naturally a bit more volatile than your typical diversified investment company.

A few standout metrics on BHP’s side:

• A current dividend yield of 3.96%, fully franked
• A P/E ratio of 22.4, much higher than Soul Patts’—though that comes with sector caveats (resources are typically ‘boom and bust’)
• Year to date, BHP is up an impressive 39.5%, outpacing even Soul Patts’ recent gains

In short, BHP is a way to gain exposure to global mining and commodities, with the kind of scale and profitability that few can match on the ASX.

Valuation comparison

When I line these two up on key numbers, here’s how they look:

Note: Both companies report 100% franking on all recent dividends. Also, BHP’s earnings per share and relatively high P/E ratio reflect its resources focus, and its larger size shouldn’t be mistaken for a safer or “better” buy.

Recent share price performance

Comparing 21 August to 18 September 2026:

• BHP: Share price has risen from $65.16 to $61.05 in this recent stretch, with a volatile ride—including a jump as high as $67.40 and some sharp drops. Overall, BHP has delivered 39.5% YTD return as of the last recorded date.
• Soul Patts: Price moved from $44.38 to $45.08, trending higher but with smaller daily swings. Year to date, Soul Patts is up 22.7% as of 18 September 2026.
• Both shares have seen some volatility, but BHP’s larger gains have come with bigger day-to-day moves—worth keeping in mind if you’re new to the market.

Which is the better buy?

If I’m picking the company that’s friendliest for beginners, my vote goes to Washington H Soul Pattinson. Here’s why: Its low P/E signals a more conservative valuation, while its business is built on diversification—meaning no single sector or commodity determines its fate. While BHP’s juicy dividend yield and huge YTD gain might tempt, its performance goes hand-in-hand with the wild swings of global commodity prices. For someone just dipping their toes in, I’d favour the relative steadiness and broad exposure of Soul Patts. BHP, for all its scale, feels better suited to those ready for a bit more risk and a rollercoaster ride. Of course, both feature fully franked dividends and proven track records—but for a beginner, simplicity and sleep-at-night-factor really matter. Based on all the numbers and characteristics here, Soul Patts is my pick as a starter stock.

The post Soul Patts vs BHP: Which ASX share is best for beginners? appeared first on The Motley Fool Australia.

More reading

• How much passive income can I earn off an $800,000 superannuation balance?
• Are the BHP and CBA share price headed for parity?
• 3 reasons to buy BHP shares for 2027
• BHP Group vs Rio Tinto shares: Which pays better dividends?
• Up 52% and paying dividends: Are BHP shares a buy, hold, or sell today?

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.