Motley Fool Australia

3 ASX shares to buy and hold forever

Hold forever ASX shares

Finding ASX shares that you can buy and hold forever could be the best way to invest.

Every time we invest it costs us brokerage. Every time we sell it creates a taxation event (which is a headache with the paperwork!).

Choosing the right businesses and holding them forever can create great long-term returns.

Here are three candidates to buy and hold forever:

Brickworks Limited (ASX: BKW) 

I think Brickworks is a ‘hold forever’ candidate because of its diverse business and the constant need for property construction.

There’s always construction happening, whether it’s a new build or a brownfield site. Brickworks has an excellent collection of building product businesses and it can start or acquire new ones if construction choices change.

Brickworks has a growing property trust in partnership with Goodman Group (ASX: GMG) which is generating stable & growing rental income for the company. Its ‘investments’ division is an excellent long-term asset.

There are new assets that could be the future profit drivers for Brickworks, like its expansion into the US property market and the partnership with FBR Ltd (ASX: FBR).

Ramsay Health Care Limited (ASX: RHC) 

I think Ramsay is a ‘hold forever’ candidate because people will always need healthcare, we are not immortal yet. I’m a bit more attracted to Ramsay these days because it intends to expand further its connection with patients outside of the hospital. If Ramsay’s healthcare services can be expanded to include a bigger sphere of people then it becomes more integral to people.

There are question marks about the affordability of private health insurance for some Australians, but Ramsay has reduced that risk by acquiring Capio in Europe – making its earnings more evenly spread between Australia and Europe.

The healthcare giant continues to open new hospitals and expand existing ones, which improves its potential earning power.

Rural Funds Group (ASX: RFF) 

Farmland has been useful for centuries and should continue to be for beyond the foreseeable future. There would need to be some type of Star Trek technology to replace farmland as a useful asset.

The agriculture sector will sometimes go through a rough patch due to drought (such as now), but Rural Funds isn’t an operating company – it just owns the farms and receives the rental income. Rural Funds does own water entitlements for tenants to use when it isn’t raining.

Management believes that the Rural Funds distribution can grow by 4% per annum due to the rental increases locked into the contracts as well as the retention of around 20% of cash earnings to improve its farms and generate further rent growth. 

Foolish takeaway

Out of the three I’d pick Brickworks, it looks cheap when you look at its assets at book value. Brickworks has excellent long-term growth potential and has a decent dividend yield too.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia has recommended Brickworks and 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.

Related Articles…

Latest posts by Tristan Harrison (see all)