There are few shares on the ASX that I would truly want to buy and feel safe holding for more than two decades. Industries can change, competitors can come and go, moats can be eroded. There is no guarantee with investing, that’s why shares are a risk. However, there is a small group of shares that I’d be more willing to lock in my money for 20 years, compared to the rest. Indeed, I own shares of all three and plan to hold for many years to come: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) Soul Patts…
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There are few shares on the ASX that I would truly want to buy and feel safe holding for more than two decades. Industries can change, competitors can come and go, moats can be eroded. There is no guarantee with investing, that’s why shares are a risk.
However, there is a small group of shares that I’d be more willing to lock in my money for 20 years, compared to the rest. Indeed, I own shares of all three and plan to hold for many years to come:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is one of the oldest companies on the ASX, having operated for over 100 years and it has also paid a dividend every year for over 100 years, including through wars and recessions.
The business is a conglomerate, it makes large and meaningful investments into companies it believes have good long-term futures. It can change its investments as time goes on, meaning it’s more adaptable than most other ASX companies. In this regard, it could easily operate for another century if it makes the right investments.
It has increased its half-year dividend consecutively for the past 20 years and it’s currently trading at 16x FY18’s estimated earnings.
Ramsay Health Care Limited (ASX: RHC)
Ramsay is the largest private hospital operator business in Australia. I’ve written many times about how Ramsay has a good tailwind thanks to Australia’s ageing population and it’s heavily investing for growth.
I think Ramsay could be a hold-forever stock because humans have always needed a centralised place of high-quality medical care for decades, if not centuries. I cannot see technology changing that reality over the next decade or two. Plus, Ramsay has somewhat of a geographical moat with its hospitals, local governments aren’t going to approve another hospital to be built close by.
Ramsay is currently trading at 22x FY18’s estimated earnings.
InvoCare Limited (ASX: IVC)
InvoCare is the largest funeral operator in Australia and New Zealand. The business may have a long-term tailwind with the number of deaths expected to rise over the years, but I think the sheer fact that a number of people die each year make it a compelling choice – as morbid as that sounds.
The business is almost guaranteed a certain amount of revenue and profit each year because it has such a large market share, meaning it should be able to provide a reliable level of profit and dividends, assuming competition doesn’t become a problem. As long as people keep dying, InvoCare will make a profit.
InvoCare is currently trading at 24x FY18’s estimated earnings.
I am a firm believer in all three shares, which is why each of them are at least 2.5% of my portfolio. At the current prices I believe that Ramsay will generate the biggest returns over the next five years, but Soul Patts could be the safest choice.
I'd also be happy to own these top stocks for the next decade.
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Motley Fool contributor Tristan Harrison owns shares of InvoCare Limited, Ramsay Health Care Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.