Washington H. Soul Pattinson & Co. Ltd (ASX: SOL) is looking like it may soon expand into data centres.
Soul Patts or “WHSP” for short is an Australian investment business run by Robert Milner. Its shares have been on the ASX for over a century.
Its history is in owning and operating Australian pharmacies, which is where the Soul Pattinson chemist chain comes from, however, that business is now owned by Australian Pharmaceutical Industries Ltd (ASX: API), which WHSP owns 19.3% of. WHSP invests in a large number of companies across a variety of industries such as construction, resources and telecommunications.
A WHSP technology play?
According to AFR Street Talk reporting, WHSP is going to invest in data centres. It’s going to work with ‘Leading Edge Data Centres’ which builds, owns and runs small data centres which are located close to the users which will help faster processing and speed up applications on devices.
Data centres are a promising industry because many users are now outsourcing data storage instead of having the computing power on site.
There are plenty of big global players as well as NextDC Ltd (ASX: NXT) in Australia. But these players are looking at the big cities, whereas Leading Edge is able to either operate alongside with them or in regional areas not serviced by the big players.
WHSP will take part with a large stake with its unlisted investment portfolio. The AFR understands Leading Edge has the right relationships, sites and configuration to do it well and profitably.
Is it worth considering WHSP shares for its dividend?
I think so.
WHSP’s diversified portfolio is getting more diversified as time goes on, opening up even more growth opportunities and hopefully long term cash flow to grow the value of the business and provide more earnings for the dividend. It’s a great dividend share. COVID-19 has caused the share price to fall to an attractive level.
Disclosure: Jaz owns shares of WHSP at the time of writing, but this could change at any time.
