There are not many ASX shares that I believe every investor should own.
Some of the factors I believe that should be ticked off are: A strong balance sheet, the potential for good long-term total returns, a growing dividend and that they operate in non-cyclical industries.
Here are two of my favourite ASX shares:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
In my opinion, Soul Patts may be the best business on the ASX. The ability for it to invest in any private business or listed share gives it excellent optionality to invest anywhere in Australia, or the world. The ability to change its holdings allows it to future-proof itself.
The fact it has already lasted for more than a century shows this investment conglomerate model works and is delivering great returns. In its latest result Soul Patts said over the past 15 years its total shareholder return (including re-investing the dividend) had been 602%.
Soul Patts itself has no debt on its balance sheet and has increased its dividend every year since 2000.
Altium Limited (ASX: ALU)
Altium is nowhere near as old as Soul Patts but its returns have been even more impressive. Over the past five years alone its share price has gone up by more than 1,300%.
Altium also has no debt on its balance sheet. It's not an investment conglomerate, it provides electronic PCB design software for many leading businesses including most of the automotive industry, Apple, Google, Amazon, Cochlear Limited (ASX: COH) and so on. The Internet of Things is going to be a long-term positive for Altium.
Altium has increased its dividend each year since 2012 and it's growing at a rapid rate.
However, Altium is certainly not cheap these days as it's trading at 46x FY20's estimated earnings.
Foolish takeaway
I believe each of these businesses have very promising futures, although they are not guaranteed to keep doing well and a global recession wouldn't be good news for them. At the current prices I would prefer to buy shares of Soul Patts.
