I am always looking for great stocks to buy and hold on the Australian stock market. Future returns are never guaranteed but strong well-run companies make for great investments.
The following are three stocks that I would buy and hold for the next five years.
Woodside Petroleum Limited (ASX: WPL)
Woodside is Australia's number one oil and gas producer. The company's recent acquisition of the remaining 50% of the Scarborough gas field it did not own in WA has further helped to increase its reserves.
With increasing demand for LNG from China, as the country looks for ways to reduce pollution and replace the use of coal as an energy source, Woodside is a good long-term bet. An added bonus is the almost 5% dividend.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Often referred to as the Berkshire Hathaway of Australia, WHSP is one of the oldest companies on the Australian Stock Exchange having listed in 1903. Originally a pharmacy focussed business it now encompasses major investments in companies as diverse as Brickworks Limited (ASX: BKW) and TPG Telecom Ltd (ASX: TPM).
Soul Patts is conservatively run with a focus on buying and holding investments for the longer term. It has an unusual cross-shareholding agreement with Brickworks, which is designed to prevent an opportunistic takeover, but it also leads to a discount of its share price to its assets. The company has also paid a dividend without fail since listing and currently distributes a 3% dividend.
Macquarie Telecom Group Ltd. (ASX: MAQ)
Originally a pure telecom company Macquarie has re-invented itself as a major cloud service provider winning major deals from government as well as a Fortune 100 customer. It has major data centres in Sydney and Canberra, although the company suggests more are likely to be added in 2019 as capacity is being filled at a rapid rate.
With a strong focus on customer service that differentiates itself from its competitors as well as strong business leadership, Macquarie should flourish as more businesses move to the cloud. At its current price, it provides a 3% dividend.
