$2,000 buys 45 shares in an impressively reliable ASX dividend stock

In an era of uncertainty, I think it could be a smart idea to own some of the most reliable ASX dividend stocks if we're relying on the dividend payments. I'd name Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) as the top option.

Soul Patts, as it's commonly known, is an investment house that has been operating for more than 120 years. Not many ASX shares can say they've been listed for more than a century.

But, I'm not just going to say it's a great business to own because it's old, though longevity is a useful attribute.

One of the more impressive elements of Soul Patts is that it has paid a dividend in every single year of its listed life, including through the world wars, the global pandemics, the economic recessions and so on. That alone is a very impressive history of reliability.

There's a lot more to like about the business as a reliable ASX dividend stock.

Excellent dividend record

There are very few ASX shares that have grown their annual dividend every year going back to the GFC approximately 20 years ago.

But, only one ASX share has increased its annual payout every year this century. Soul Patts has the best record.

The ASX dividend stock has increased its annual ordinary dividend every year since 1998. If that doesn't make it Australia's most reliable business for dividends, I don't know what would.

In the latest result, being the FY26 half-year result, Soul Patts decided to hike its interim dividend per share by 9.1% to 48 cents. That shows the business isn't just growing its payout by 1% per year, it's delivering sizeable increases.  

It currently has a grossed-up dividend yield of 3.5%, including franking credits, at the time of writing.

Rising cash flow

The business pays for its dividends from the cash flow that's generated by its portfolio.

Its investment portfolio is spread across a number of industries including resources, energy, swimming schools, agriculture, property, credit, retirement living, water entitlements, financial services and plenty more.

By having a diversified portfolio that generate defensive cash flow, the business is able to continue providing reliable dividends.

But, the company doesn't pay out all of its cash flow each year. The retained earnings can be used to invest in more opportunities.

In the FY26 first-half result, the company reported that its net cash flow from investments grew by 15.4% to $334 million. Its interim dividend only represented 54% of net cash flow from investments.

I expect the ASX dividend stock's cash flow can continue to grow in the coming years.

Growing net asset value

Not only is the company growing its dividends and cash flow for shareholders, but the underlying value of the Soul Patts portfolio is increasing over time, which is a tailwind for the Soul Patts share price.

The business is investing in new assets, and its existing investments are growing.

In the first half of FY26, its net asset value (NAV) grew by 14.6% to $13.8 billion. I'm not expecting every result to show year-over-year growth of around 15%, but I think it's likely to continue compounding at a pleasing pace.

With $2,000, an investor could buy 45 Soul Patts shares, which I think would be a great long-term buy.

The post $2,000 buys 45 shares in an impressively reliable ASX dividend stock appeared first on The Motley Fool Australia.

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.

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