Here's why I'm going to invest in more Soul Pattinson shares in June

The investment house is firmly in my sights next month…

| More on:
Smiling man sits in front of a graph on computer while using his mobile phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • I am planning on buying some more Soul Pattinson shares in June 2022
  • It’s an investment house with a lot of diversification
  • The business has grown its dividend every year since 2000

I like to regularly invest in ASX shares, usually every month. In June, I'm planning on buying more shares in Washington H. Soul Pattinson and Co Ltd (ASX: SOL).

While the investment house isn't currently one of my biggest positions, I would like to grow my position in the company at the right price.

And I'm thinking that the current Soul Pattinson share price is the right price.

Below are the main reasons why I'm thinking about investing in more of its shares.

Soul Pattinson shares are cheaper

One of the most important parts of investing, in my opinion, is picking the right investment and buying it at a good price for the long term.

The Soul Pattinson share price has fallen by approximately 16% since the start of the 2022 calendar year. While its shares haven't exactly crashed, I think this price is more attractive than it was when the year started.

Management has created a long-term reputation for value creation. I think the current Soul Pattinson share price now offers a good opportunity for me to increase my exposure.

Great diversification

In a volatile market like this, which has generally been trending downward, I think Soul Pattinson is a useful business with good diversification across a number of different industries.

The ASX share is invested in areas such as telecommunications, resources, agriculture, banking, financial services, swimming schools, and luxury retirement living. It's also invested in areas like venture capital, property, structured credit, and cash.

Soul Pattinson says its portfolio of assets generates "reliable" cash flow through market cycles which can protect against the downside in market corrections.

I think Soul Pattinson is one of the easiest businesses to think long-term about because of its own investment strategy in investing long term with its holdings and possible future investments.

Investment universe

I really like that Soul Pattinson can choose to invest in any asset class that it wants to. This allows the business to diversify but also means the company can throw its investment net far and wide to try to find potential opportunities.

The company points out that a "flexible investment mandate allows WHSP to invest in and support companies from an early stage and grow with them over the long term".

The flexibility of Soul Pattinson to invest in areas such as agriculture, retirement living, global shares, education, and so on gives it more sectors to look at for opportunities. In this period of market declines, there are plenty of potential opportunities for the company to look at.

Dividend

The Soul Pattinson dividend is one of the main reasons that I like this ASX share.

While the grossed-up dividend yield is 3.5%, it has built a long-term record of dividend stability and growth.

It has grown its dividend every year since 2000, which is a useful streak of growing cash returns while the Soul Pattinson share price goes up and down with the ASX share market.

Foolish takeaway

At the current Soul Pattinson share price, I'm quite eager to buy some more shares. Even if it were to rise a little, I'd still want to buy a parcel of shares because of how good I think the business is as an ultra-long-term investment.

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended 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 Scott Phillips.

More on Opinions

guy helping girl invest in shares and dividends
Opinions

5 ways for investors buying ASX shares to stay focused during economic uncertainty

AMP Chief Economist, Dr Shane Oliver, offers advice on how to handle the Trump factor.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

1 ASX growth stock down 30% I'd buy right now

This international business is growing core earnings at a strong rate.

Read more »

A young man wearing glasses writes down his stock picks in his living room.
Opinions

1 ASX stock I'm buying now that the US election is over

This ASX stock is appealing to me for a few different factors.

Read more »

Woman smiling with her hands behind her back on her couch, symbolising passive income.
Opinions

This ASX stock 10x my money. Here's why I haven't sold a single share

It looks stupidly expensive... so why have I held on this entire time?

Read more »

Three women cruise along enjoying ice-creams in the sunshine.
Opinions

My 3 favourite Australian stocks to buy right now

I’m bullish about these ASX shares for the long-term.

Read more »

A view from the track behind a runner in the starting block.
Opinions

3 beginner-friendly ASX shares perfect for Aussie investors starting out in November

Here’s why I like the look of these ASX shares for beginners.

Read more »

A man in his late 60s, retirement age, emerges from the Australian surf carrying a surfboard under his arm and wearing a wetsuit.
Opinions

Here's how much ASX dividend income I'm aiming for in retirement

I’m using passive income stocks as a path to financial independence.

Read more »

A woman's hair is blown back and her face is in shock at this big news.
Bank Shares

$150 a pop: Would I still buy CBA shares as they hit all-time highs?

Here's my take on CBA shares at $150...

Read more »