Soul Patts vs Macquarie Group: Best ASX dividend stock for retirees?

Washington H Soul Pattinson vs Macquarie Group shares: Which dividend stock suits retirees best?

If you’re a retiree thinking about income and stability, two blue-chip ASX names might be sitting on your shortlist: Washington H Soul Pattinson and Co Ltd (ASX: SOL) and Macquarie Group Ltd (ASX: MQG). They’re both stalwarts, well-regarded for diversified holdings and consistent dividends—but which one really deserves a place in a retiree’s portfolio? Here’s how they compare on yield, franking, and all-important reliability.

The case for Washington H Soul Pattinson and Co

Washington H Soul Pattinson—often known as Soul Patts—has its roots in Australian pharmacy, but these days is best described as a diversified investment house. Over its long history (listed since 1903), Soul Patts has built a portfolio spanning listed and private companies, real assets, and emerging ventures. Some of its largest stakes, according to its most recent public description, are in TPG Telecom and New Hope Corporation. The 2025 merger with Brickworks has also made Brickworks a subsidiary under the Soul Patts umbrella.

From a fundamentals viewpoint, several things stand out. Soul Patts has a market cap of $17.29 billion and sports a price-to-earnings (P/E) ratio of 7.08, which is much lower than Macquarie’s. The dividend yield clocks in at 2.36%, but perhaps most attractive for retirees, dividends come fully franked—at a rate of 100%. That means shareholders can potentially claim the full benefit of franking credits. Soul Patts has a long streak of consistently increasing dividends, rarely missing an opportunity to reward shareholders with reliable, tax-effective income.

The case for Macquarie Group

Macquarie Group is one of Australia’s financial powerhouses, providing banking, funds management, advisory, and investment services in more than 30 countries. While technically a bank, Macquarie differs from the “big four,” with much of its money made from asset management, infrastructure, and investment banking rather than traditional retail banking.

Looking at the numbers, Macquarie is a much larger company, with a $92.97 billion market cap and a significantly higher P/E ratio of 19.12. The dividend yield is a touch higher at 2.89%. A big plus is the generous dollar amount per share—for this year, $7.00 per share in dividends. However, only 35% of those dividends are franked, which means Australian retirees won’t get the maximum tax benefit from those payments. Macquarie’s size and global reputation add a layer of strength, and its dividends tend to be relatively predictable, but they may be less tax-effective compared to Soul Patts.

Valuation comparison

Here’s how the two stack up side-by-side on key metrics:

Note: Dividend yields are relatively close, but Macquarie’s dividends are only partially franked, while Soul Patts offers fully franked dividends—often a priority for income-focused investors. It’s also notable that Soul Patts’ P/E suggests a much lower valuation relative to current earnings. If you notice the gap between EPS and P/E, keep in mind that reported P/E ratios may sometimes be based on underlying or future earnings rather than trailing or statutory EPS, which can create apparent inconsistencies.

Recent share price performance

Let’s consider recent share price action (up until 23 September):

• Washington H Soul Pattinson closed at $45.51 on 23 Sept 2026, up slightly by 0.2% from the previous day.
• Year-to-date return for SOL shares sits at 23.6%—a strong showing.
• Macquarie Group closed at $242.35 on 23 Sept 2026, barely changed from the day prior (+0.03%).
• Year-to-date return for MQG shares is 21.3%, also very healthy.

That’s robust price momentum for both, with Soul Patts very slightly ahead on total return as of the latest figures.

Which is the better buy?

For my money, if I were a retiree primarily after dividends, my pick would be Washington H Soul Pattinson. Here’s why: even though its headline yield is a tad lower than Macquarie’s, Soul Patts’ commitment to 100% franking maximises the after-tax cash flow for most Australian retirees, especially those who can use franking credits to reduce or eliminate tax. Soul Patts also carries a much lower P/E ratio, which suggests either a lower price relative to earnings or simply a market expectation of steadier but less spectacular growth. Its history of consistent—and growing—dividends gives me extra confidence for dependable income.

That’s not to say Macquarie isn’t impressive; it’s a massive institution offering higher absolute dividend dollars, a slightly higher yield, and global stability. However, the lower franking cuts into the tax advantage, which is often a make-or-break factor in retirement income streams. Both are excellent businesses, but for franked, tax-effective dividends and reliable track record, I’d lean towards Washington H Soul Pattinson in a retiree-focused portfolio.

The post Soul Patts vs Macquarie Group: Best ASX dividend stock for retirees? appeared first on The Motley Fool Australia.

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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 Macquarie Group and 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 Macquarie 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.