The TPG Telecom Ltd (ASX: TPM) share price and Macquarie Group Ltd (ASX: MQG) share price may not grow as quick as they have done in recent years, but both blue chips could be primed for long-term returns.
Macquarie share price versus TPG Telecom share price
As can be seen, both companies have experienced their ups and downs, yet have achieved a very impressive return over the past five years.
Macquarie
Macquarie is Australia's largest investment bank. An investment bank is different from a retail bank like, say, Commonwealth Bank of Australia (ASX: CBA), in that they do much more than personal and standard business banking.
If you have ever wondered how a company like Virgin Australia Holdings Ltd (ASX: VAH) can afford to buy big planes, chances are, they will go see the specialist finance team at an investment bank like Macquarie. Or, if you have a bakery business that needs a loan, you might go to National Australia Bank Ltd. (ASX: NAB). But if you have a manufacturing business that needs to secure commodities sourced from Brazil in US dollars but you don't want any currency risk, you would talk to Macquarie.
Macquarie's reach extends around the globe, from Europe through the Americas to Asia. After the business fell into disarray during the global financial crisis, Macquarie decided to push into 'annuity style businesses'. Meaning, businesses that aren't as reliant on markets to turn a profit. Think fleet financing and property management.
Macquarie recently guided for a mostly flat end to its current financial year, so investors might not be enthusiastic about the company right now. However, analysts forecast more growth. And while it is dependent on the global economy and financial markets to continue growing its profit year after year, it appears to be a good one for the bottom drawer. That is, over five years of more.
TPG Telecom
TPG is the well-run telecommunications business made popular by the ads selling cheap unlimited broadband and home phone packages. The company has invested heavily in infrastructure, like fibre networks, and having acquired iiNet its reach is now much wider and deeper.
The company should be a net winner from the NBN rollout. But even if it isn't immediately apparent, TPG is taking its successful broadband marketing into mobile's, offering budget plans with generous limits. It is also seeking to expand into Singapore.
Although the market recently fell out of love with TPG shares (see the red line above), I think it is capable of modest but reliable growth over the long-term.
Foolish Takeaway
At today's prices, I think long-term investors could do worse than add TPG or Macquarie to their watchlist and run the ruler over them a little more closely.
