2 high quality ASX growth shares to buy and hold for the next 10 years

Here's two top grade businesses where you can sit back and let them compound over time. One is diversified between industries and the other has popular international brands.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Many people are focused on short-term wins in the sharemarket. A quick trade here, and a few speculative plays over there. While it sometimes works, these punters are missing out on the best part of investing – compounding.

Investing for the long-term works for so many reasons. Lower taxes. Lower transaction costs. Less effort. Most effective of all is letting those investments grow over time, rather than having to find new trading opportunities.

Here are two investments which I think are a good bet over the next decade.

Washington H. Soul Pattinson & Co. Ltd (ASX: SOL)

Soul Patts is probably the most boring growth company on the ASX. But I say that in the best possible way. Over the long term, this company has been one of the best investments you could possibly ask for.

Over the last 40 years, Soul Patts has shown a return of 16.4% per annum. Not only that, it has increased the dividend every year since 2000.

It's very well diversified, with stakes in solid businesses such as Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPM) and New Hope Corporation Limited (ASX: NHC). Management also owns a large amount of shares giving good alignment with shareholders.

I expect Soul Patts will continue to prosper over the next 10 years and beyond. Shares are up over 50% this year, but still don't look all that expensive to me.  The current dividend yield is 3% including franking credits.

Treasury Wine Estates Ltd (ASX: TWE)

Shares in the global winemaker and distributor are down around 30% from the highs earlier in the year, making the company more attractively valued today. Earnings continue to increase, with Treasury selling more wine at higher prices, as its premium brand strategy gains momentum.

Over the last 5 years, earnings per share has grown by 17% per annum, while the dividend has also increased regularly. During FY 2019, management is expecting to deliver profit growth of 25%.

Given the strong brands in its wine portfolio and the company's growing Asian segment, it seems likely that Treasury will be earning much more in 10 years than it is today. Shares currently trade on a dividend yield of 3.7% including franking credits.

Motley Fool contributor Dave Gow owns shares of Brickworks, Treasury Wine Estates Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks and TPG Telecom 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.

More on Growth Shares

Happy work colleagues give each other a fist pump.
Growth Shares

2 super ASX growth shares to buy for huge returns

Analysts are feeling bullish about these shares. Let's see what they are saying about them.

Read more »

A fresh-faced young woman holds an Australian flag aloft above her head as she smiles widely on a beach as though celebrating a national day or event where Australia has been successful.
Growth Shares

The best Australian shares to buy with $1,000 right now 

Analysts think these shares could be great options for Aussie investors when the market reopens.

Read more »

A young man goes over his finances and investment portfolio at home.
Growth Shares

Why earning 4% to 5% in a term deposit 'isn't that attractive'

The upside is capped on the most risk-less investments.

Read more »

A woman makes the task of vacuuming fun, leaping while she pretends it is an air guitar.
Growth Shares

Overinvested in WiseTech shares? Here are two alternative ASX growth stocks

WiseTech shares are great, but there are other exciting growth stocks out there.

Read more »

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company
Growth Shares

These ASX 200 growth shares could rise 65% and 100%

Big returns could be on offer for buyers of these shares according to analysts.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Growth Shares

Is this growing ASX 300 stock a top buy?

Let's see what analysts are saying about this high flying company.

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Growth Shares

3 excellent ASX growth shares to buy for market-beating returns

Let's see why analysts are feeling bullish about these growing companies.

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Growth Shares

4 ASX shares to buy now and hold for a lifetime in your super fund

Analysts have very good things to say about these stocks.

Read more »