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.
TLS shares
Starting life as a state-owned enterprise, Telstra has gone through many stages to today be Australia’s largest telecommunications company by market share. They provided over 22.5 million retail mobile accounts in 2023.
Telstra is responsible for building and operating telecommunication networks. Revenue comes from a range of activities including fixed broadband, mobile, data and IP, and digital media. The company has also expanded outside of Australia to over 20 countries where it provides services to governments and businesses.
The competitive advantage that Telstra has over competitors lies in its reach and scale, providing coverage to 99.6% of the Australian population and 5G services to over 85%.
SOL & TLS 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.
As for Telstra Group Ltd, they reported a debt/equity ratio of 99.4% in FY24, meaning the company has more equity than debt.
Since 2019 TLS has achieved an average dividend yield of 3.6% per year, and in FY24 reported an ROE of 10.7%
Keep in mind that these are only a small selection of metrics. We don’t have 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.
