Finding the greatest dividend share on the S&P/ASX 200 Index (ASX: XJO) is no easy task. The ASX 200 has dozens and dozens of dividend shares within it. And many are popular with good reason.
The likes of Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS) and BHP Group Ltd (ASX: BHP) have been showering investors with healthy dividends for decades.
But none of these I would call the ASX 200's greatest divided share. Ditto with Woolworths Group Ltd (ASX: WOW), Woodside Energy Group Ltd (ASX: WDS) or Westpac Banking Corp (ASX: WBC). All are decent companies, but I wouldn't put any of them on a pedestal above the rest.
But when it comes to Washington H. Soul Pattinson and Co Ltd (ASX: SOL), this is a share I simply cannot find a fault with.
Image source: Getty Images
What makes Soul Patts a unique winner?
Soul Patts, as it is more easily known, is an ASX 200 investment house. It has been on the ASX boards for almost as long as the ASX has existed. In fact, its roots predate Federation.
Back in the late 18th and early 19th centuries, Soul Patts was primarily a pharmaceutical chain. But today, it is a company that primarily invests in other assets on behalf of its investors. Soul Patts has large stakes in many other ASX 200 shares to start off with. It has owned significant portions of Brickworks Ltd (ASX: BKW), New Hope Corporation Limited (ASX: NHC) and TPG Telecom Ltd (ASX: TPG) for years.
The company has also built up a few other portfolios more recently as well though. Soul Patts cultivated a massive and broad portfolio of blue-chip ASX 200 shares when it acquired Milton Corporation in 2021. It has also expanded into unlisted assets and private credit and equity in recent years, buying assets like farms, swim centres and retirement villages.
But what makes this company the ASX 200's greatest dividend share? Well, it's rather simple. Soul Patts is the only company on the ASX that has delivered an annual dividend pay rise every single year since 2000.
Yes, Soul Patts has given its investors a pay rise for 22 years and counting. That includes the global financial crisis of 2007-09, as well as the COVID-ravaged years of 2020 and 2021. No other ASX share can boast of such an impressive track record.
The greatest ASX 200 dividend share
If you invested $10,000 into Soul Patts shares at the start of the year 2000, you would have received 2,564 shares of Soul Patts at the share price of $3.90 that the company was going for back then.
Over 2000, Soul Patts forked out 10.5 cents per share in ordinary dividends, as well as 3.5 cents per share in special dividends, for a total of 14 cents per share. That would have gotten our investor a starting yield of 3.59% back then.
By 2022, Soul Patts' annual dividends had risen to 72 cents per share of ordinary dividends, as well as 15 cents per share in special dividends, for a total of 87 cents in fully-franked dividends per share. For our investor that forked out $10,000 for 2,564 shares in 2000, last year's payments would have totalled just over $2,230, or a whopping 22.32% yield on their original investment.
Additionally, those 2,564 shares would be worth $86,253 at the current Soul Patts share price of $33.65 that we see today.
According to the company itself, Soul Patts shareholders have enjoyed an average annual return (including dividend returns) of 12.3% per annum over the 20 years to 31 January 2023. That crushes both the broader ASX 200 index, as well as most other ASX 200 shares:
So it's for these reasons that Wasongton H. Soul Pattinson can and should be regarded as the greatest ASX 200 dividend share on the market today. Sure, it doesn't have the highest starting dividend yield right now at 2.35%. But this is a clear case of 'slow and steady wins the race' when it comes to dividend investing.
