SOL share price in focus
Founded in 1903, Washington H. Soul Pattinson (WHSP) is an investment company with a diversified portfolio spanning various industries and asset classes.
Some of its largest holdings include significant stakes in well-known publicly listed companies such as TPG Telecom (ASX: TPG), New Hope Group (ASX: NHC), and a cross-shareholding in Brickworks (ASX: BKW).
SOL’s goal is to deliver strong returns to its shareholders through capital growth and a consistent increase in dividends as a holding company. As the second-oldest publicly listed company on the ASX, it boasts a long history of capital appreciation and dividend reliability. In fact, it has never missed a dividend payment since its listing in 1903! SOL operates like a family-run LIC, with a focus on the benefit of all shareholders, who are closely aligned with the company’s success.
QAN shares
Qantas was founded in 1921 and is today Australia’s largest airline operator by fleet size, number of international flights, and number of destinations.
It’s involved in the operation of domestic and international flights under its Qantas and Jetstar brands, as well as freight services and the management of its frequent flyer loyalty program.
Despite (or perhaps because of) its significant market power, the airline has fallen out of favour with Australian consumers over the last few years, consistently ranking as one of the country’s most distrusted brands according to Roy Morgan surveys. Still, with a huge market share and more services than other airlines they’ve managed to continue growing revenue and profit since the end of the pandemic.
SOL share price valuation
We would consider SOL to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.
For FY24, Washington H Soul Pattinson & Company Ltd reported a debt/equity ratio of 8.5%, meaning the company has more equity than debt.
Over the last 5 years, SOL has delivered an average dividend yield of 2.4% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, SOL reported an ROE of 5.6%. For a mature business you generally want to see an ROE of more than 10%, so SOL’s returns are a bit less than what we’d expect.
In FY24, Qantas Airways Limited reported a debt/equity ratio of 2241.8%, meaning the company is leveraged.
As for dividends, since 2019 QAN has achieved an average dividend yield of 1.2% per year, and in FY24 reported an ROE of 823.0%
It’s important to keep in mind that these are only a small selection of metrics and don’t give us enough information to value the business or make an investment decision. To learn more about valuation, check out one of our free online investing courses.
