Why ‘ASX dividend king’ Soul Patts (ASX:SOL) is a top income share for 2021

The king of ASX dividend shares, Washington H. Soul Pattinson & Co Ltd (ASX: SOL) held its annual general meeting (AGM) this morning. I won’t bore you with the nitty-gritty details, as they were comprehensively poured over by my Fool colleague Eddy Sunato earlier today.

But in a nutshell, Soul Patts reported some solid performances from its investment portfolio (especially from its holdings in the resources sector), as well as a 44% slide in net profits before tax.

But what really stands out is this company’s dividend record.

You may have picked up that I described Soul Patts as the ‘king of ASX dividend shares’ earlier. That’s because this company simply has the best record when it comes to paying dividends out of any company in the ASX’s All Ordinaries Index (ASX: XAO).

That record was helpfully brought up at the AGM this morning.

An unbeatable dividend history

The company was happy to remind investors that it remains the only ASX company to have increased its dividend payments for a consecutive 20-year period. And yes, that does include 2020, a year which has been many ASX stalwarts slash their dividends, much to shareholders’ dismay.

It’s not just tokenistic annual increases either. Soul Patts’s dividends in 2001 amounted to 11 cents a share. In 2020, they were 60 cents a share, which the company was pleased to tell us amounts to a compounded annual growth rate of 9.2% per annum (which handily outstrips inflation). In 2020 alone, the increase was a comfortable 3.4% on 2019’s payouts.

This streak of dividend payments has benefitted shareholders over the past 2 decades. Soul Patts told us that the company’s total shareholders returns (combining share price growth and dividends) have outperformed the All Ordinaries Accumulation Index (ASX: XAOA), which also includes growth and dividends, over 1, 5, 10, 15 and 20 years. On the last metric, Soul Patts has reportedly managed to return an average of 14.3% per year to investors. That outperforms the index’s 8.1% average by 6.2% every year.

This 14.3% metric holds constant over the proceeding 20 years as well. The company also tells us that it has delivered an average of 14.4% per annum since 1980. That means a $1,000 investment in 1980, with dividends reinvested, would be worth $216,4760 today. Enough said.

Soul Patts’ portfolio

Soul Patts is an industrial conglomerate. It owns a vast portfolio of underlying investments, which its management team runs on behalf of its shareholders. This portfolio consists of large stakes in a number of ASX shares, including Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC) and Australian Pharmaceutical Industries Ltd (ASX: API).

It also includes a collection of unlisted assets and private companies. These include Round Oak Minerals (a copper and zinc miner) and various properties such as retirement homes and farms.

More reading

• The Archer (ASX:AXE) share price lifts on partnership deal
• Washington H. Soul Pattinson (ASX:SOL) share price rises 2% after upbeat AGM
• S&P Global set to launch world’s first cryptocurrency index
• Why the MSM (ASX:MSM) share price has gone gangbusters again
• 3 reasons why Soul Patts (ASX:SOL) is a great ASX dividend share

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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