I think that ASX share Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is the best long-term idea that you can buy idea on the ASX. For ease, it’s also called Soul Patts.

When I say ‘long-term’, I’m not talking about a year or two. I mean it’s an investment you could hold onto for at least two decades and do well with.

Overview of Soul Patts

It’s an investment conglomerate that has been operating since 1903. It’s actually one of the oldest businesses on the ASX.

The company started off as a pharmacy business after two different families merged their pharmacy businesses together. There are some employees who been working for a long time for Soul Patts.

More than 40 employees have worked for the company for over 50 years. Five generations of the Pattinson family have served the company, as have three generations of the Dixson, Spence, Rowe and Letters families.

Diversification

I think one of the most important reasons to like Soul Patts is its diversification. It may have started off as a pharmacy business, but it’s now a diversified conglomerate. It’s invested in both listed and unlisted businesses which makes it somewhat similar to Warren Buffett’s Berkshire Hathaway.

It’s a large shareholder of telco TPG Telecom Ltd (ASX: TPM), resources business New Hope Corporation Limited (ASX: NHC), diversified property business Brickworks Limited (ASX: BKW), pharmacy company Australian Pharmaceutical Industries Ltd (ASX: API) and listed investment company (LIC) Bki Investment Co Ltd (ASX: BKI).

Some of the unlisted businesses Soul Patts is invested in are: electrical supplier Ampcontrol, resources subsidiary Round Oak, agriculture and swimming schools.

Diversification is a key factor for liking this ASX share. It’s invested across numerous industries, so there’s less risk if one investment does badly.

I think a broad investment mandate is attractive. It means that the management team can look almost anywhere to find the next opportunity.

This ability to change the asset base over time means you may never need to sell your Soul Patts shares. It’s helpful for your wealth if you don’t have to trigger a capital gains tax event and potentially pay over a material portion of the gains over to the ATO.

Solid long-term returns

Management are long-term focused with their investing. Management think many years ahead when making an investment. The fact that Soul Patts is thinking long-term can give us confidence to invest in the ASX share itself for the long-term.

Its strategy has clearly paid off over the decades. Over 20 years to 31 January 2020, the Soul Patts total shareholder return was 13.2% per annum, outperforming the All Ordinaries Accumulation Index by 4.6% per annum.

The new investments that Soul Patts is making could continue this solid performance. It is planning on expanding into regional data centres. I think this could be a very smart move. It could do particularly well if the work-from-home trend is a permanent change for some workers.

Soul Patts dividend

If consistent dividend growth is a priority for you then this ASX share is probably the best in Australia.

It has grown its dividend every year since 2000. I think that’s a really impressive record considering it includes the GFC period and Soul Patts also plans to pay an increased dividend later this year.

The ASX share has actually paid a dividend every year in its existence going back to 1903. This includes the though times of the Spanish Flu and the world wars.

It currently has a grossed-up dividend yield of 4.4%. I think that’s solid in today’s low interest world. 

Foolish takeaway

There are several great reasons to like Soul Patts. It’s the largest position in my portfolio and I plan to hold it in my portfolio forever. I’d be happy to buy more at the current share price.  

More reading

• If I won the lottery I’d buy these 6 ASX shares
• 12 top ASX dividend shares to buy in June 2020
• Have $1,000? You should pick one of these 8 ASX shares
• 3 ASX 200 shares I’d buy for 2020 and beyond
• 2 ASX shares I’d buy in a heartbeat

Motley Fool contributor Tristan Harrison 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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why I think that Soul Patts is the best long-term ASX share appeared first on Motley Fool Australia.

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Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

BWP Trust (ASX: BWP)

According to a note out of Ord Minnett, its analysts have upgraded this real estate investment trust’s shares to a buy rating with an improved price target of $4.40. The broker believes that BWP, which is predominantly a landlord to Bunnings Warehouse, is undervalued. Especially given its long leases. I agree with Ord Minnett on BWP and believe it is a great option for investors. This is particularly the case for income investors due to its attractive yield.

CSL Limited (ASX: CSL)

Analysts at Citi have retained their buy rating and $334.00 price target on this biotherapeutics company’s shares. The broker appears pleased with its decision to exercise its right to acquire Vitaeris and sees potential in its clazakizumab product. Outside this, the broker believes that increasing demand for flu vaccines could offset some of the potential weakness in plasma collections in FY 2021. I agree with Citi and would be a buyer of CSL’s shares.

Qantas Airways Limited (ASX: QAN)

A note out of UBS reveals that its analysts have retained their buy rating and lifted their price target on this airline operator’s shares to $5.50. According to the note, the broker believes there is a lot of pent up demand for travel and expects the domestic travel market to rebound strongly when border restrictions are lifted. This has led to the broker upgrading its earnings forecasts and lifting its price target accordingly. As long as there isn’t a second wave, I think Qantas could prove to be a good investment.

More reading

• You could beat the market in the 2020s with these ASX healthcare shares
• How I would build a balanced portfolio worth $100,000 with 10 ASX shares
• Should you buy CSL shares before it’s too late?
• Is the Qantas share price a buy today?
• 3 quality ASX dividend shares to solve your income needs

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Top brokers name 3 ASX 200 shares to buy next week appeared first on Motley Fool Australia.

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