I think WHSP (ASX: SOL) is a solid ASX share for all of the COVID-19 uncertainty. I’d be pleased to buy shares today for a number of reasons.
What is WHSP?
Washington H Soul Pattinson & Co. Ltd is an investment house business which has been on the ASX for over a century. Its origins are in owning and operating Australian pharmacies, which is where the Soul Pattinson chemist chain comes from, however, that business is now owned by Australian Pharmaceutical Industries Ltd (ASX: API), which WHSP owns 19.3% of. WHSP invests in a large number of companies across a variety of industries such as construction, resources and telecommunications.
The reliability of WHSP
There are very few ASX shares that are as old as WHSP. The investment house was first listed onto the Sydney Stock Exchange in 1903. That means it has already survived through a number of business-ending events. There was the Spanish Flu a century ago, WHSP got through that. The first and second world wars happened – WHSP got through that. There have been various big recessions, particularly the Great Depression and the GFC – WHSP is still standing.
WHSP’s conservative balance sheet and diversified portfolio means it’s robust and isn’t in danger of going out of business unless all of its investments also go bust.
The portfolio
WHSP isn’t an ETF, but it’s invested in so many different businesses that you can definitely be comforted by its level of diversification.
Its listed holdings are names like TPG (ASX: TPG), Brickworks (ASX: BKW), New Hope (ASX: NHC), Australian Pharmaceutical Industries (ASX: API), Apex Healthcare, Pengana Capital (ASX: PCG), Palla (ASX: PAL), Milton (ASX: MLT), BKI (ASX: BKI), Clover (ASX: CLV), CBA (ASX: CBA), Woolworths (ASX: WOW), Macquarie (ASX: MQG), Pengana International Equities (ASX: PIA), Magellan (ASX: MFG) and Bailador Technology (ASX: BTI).
It also owns stakes in unlisted assets like farmland, resources, swimming schools, cleaning services and so on. Plus, it owns a small property portfolio.
At the moment a large amount of the portfolio is focused on TPG and Brickworks. As an internet provider, TPG has a very defensive source of earnings – people need their internet. Brickworks’ construction products are under pressure, but its property trust and WHSP shares remain defensive.
Unstoppable dividend growth
WHSP has one of the best dividend growth records around. Its quality investment portfolio funds WHSP’s own dividend.
Each reporting period WHSP tells investors about its regular operating cashflows, which is its total dividend and distribution income, minus its expenses and finance costs. WHSP paid 64.6% of its regular operating cash flows out as a dividend for its interim dividend.
WHSP has actually grown its dividend every year since 2000. Right now, WHSP has a fully franked dividend yield of 2.9%.
[ls_content_block id=”14947″ para=”paragraphs”]
