2 quality ASX shares to buy for long-term growth

Here we look at 2 quality ASX shares to buy for long term growth: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Blackmores Limited (ASX: BKL).

| More on:

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

Looking for ASX shares with strong long-term growth potential?

I believe that the following 2 ASX shares are worth considering, and falls in their share prices over the past few months add to their appeal.

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

Some of our leading companies on the S&P/ASX 200 Index (ASX: XJO) that are normally viewed as strong and consistent dividend payers have either suspended or reduced their next dividend payments this year. This includes the likes of Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and National Australia Bank Ltd. (ASX: NAB). However, there are so far no indications that 'Soul Patts' will follow down this path.

Soul Patts currently offers an attractive fully franked grossed-up dividend yield of around 4.7% and has increased its dividend every year since 2000. The group keeps a meaningful amount of cash on its balance sheet and this cash can be used as a buffer in difficult operating times. Soul Patts funds its dividends from its net regular cashflow and its next dividend is expected to be similar to the prior year for FY 2020.

This strong balance sheet also places it in an ideal position to capitalise on any worthwhile investment opportunities if they suddenly arise, which is one of the reasons why I think Soul Patts has strong long-term growth potential. These growth prospects are also supported by its excellent management team and strong diversification across a broad range of industries.

Blackmores Limited (ASX: BKL)

There is no doubt that Blackmores' recent financial performance has been somewhat disappointing.

In its most recent half-year results back in February, Blackmores revealed a 20% revenue decline in its Australia and New Zealand segment and the company's China segment saw revenue drop by 6%. However, on a more positive note, the company does now appear to be getting its business back on track again after its entry strategy into China, in particular, has struggled in recent times.

Blackmores has put in place plans to strengthen its Australian business as it realigns its overall business strategy, which includes plans to further extend its investments into China. The company also plans an increased focus on the Indonesian market and aims to enter the Indian market within the next 12 months.

Blackmores' management has also reported the coronavirus pandemic has resulted in a spike in demand for vitamin C and other immunity products both in Australia and internationally.

I believe that the coronavirus pandemic could potentially even change the mindset of some consumers to the benefit of supplements, leading to higher demand in the years ahead.

Motley Fool contributor Phil Harpur owns shares of Australia & New Zealand Banking Group Limited, Blackmores Limited, and Westpac Banking. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Washington H. Soul Pattinson and Company 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 Share Market News

a group of enthusiastic people dash out of open doors as though in a hurry to purchase something. The picture features the legs of some people, faces of others and people in the background trying to get through the crowd.
Opinions

Why I'm calling this ASX reporting season 'buying season'

Reporting season might come in like a wrecking ball... and that's fine by me.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Broker Notes

These ASX shares could rise 20% to 40%

Big returns could be on offer from these stocks according to analysts.

Read more »

A man in his office leans back in his chair with his hands behind his head looking out his window at the city, sitting back and relaxed, confident in his ASX share investments for the long term.
Share Market News

Good ASX news! Australia's 'one of the cleanest markets in the world'

Investors can sleep well at night knowing our market system has integrity.

Read more »

three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.
Share Market News

5 Australian shares to buy and hold forever

Analysts think these buy-rated shares would be great options for investors.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Share Market News

Could Fortescue shares fall a further 14% from here?

Bell Potter is tipping the mining giant's shares to continue sinking.

Read more »

Happy work colleagues give each other a fist pump.
Share Market News

Here are the top 10 ASX 200 shares today

The ASX actually finished its week on a high note today.

Read more »

Two parents and two children happily eat pizza in their kitchen as a top broker predicts a 46% upside for the Domino's share price
Broker Notes

Buy one, sell the other: Goldman's take on these 2 ASX retail shares

Despite high interest rates and inflation, ASX retail shares have been on a strong run.

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Bellevue Gold, Chrysos, Meteoric Resources, and Newmont shares are falling today

These shares are having a tough finish to the week. But why?

Read more »