Arguably one of the best ways to generate wealth is to make long term investments. This is because by investing for long periods, it allows you to benefit from compounding.
But which shares would make good buy and hold investment options? Two to consider are listed below. Here’s why they are rated highly:
CSL Limited (ASX: CSL)
CSL is one of the world’s leading biotherapeutics companies and the name behind the CSL Behring and Seqirus businesses. CSL Behring is the global leader in plasma therapies, whereas Seqirus is the second largest influenza vaccines business.
Both businesses have been growing strongly in recent years and have been tipped to continue doing so in the future. This is due to their leading therapies and vaccines, increasing demand, and lucrative research and development pipelines.
In respect to the latter, CSL invests in the region of 11% of its sales into its research and development activities each year. This ensures that it has a pipeline of cutting-edge therapies with significant sales potential. One of those is clazakizumab, which is being developed to treat kidney transplant rejection. This product alone could generate peak sales of US$5.4 billion.
UBS currently has a buy rating and $330.00 price target on CSL’s shares.
Xero is leading cloud-based business and accounting solution provider to small and medium sized businesses. It offers businesses and their advisors a solution that provides deep cloud accounting functionality together with an ecosystem of over 800 third-party app partners to provide valuable access for small businesses to add point solutions where needed.
This offering is resonating extremely well with businesses across the world, underpinning very strong recurring revenue growth in recent years.
Pleasingly, the company still has a significant market opportunity to grow into. Management estimates that its total addressable market is worth NZ$45 billion at present and growing. This compares to FY 2021’s operating revenue of NZ$848.8 million.
Goldman Sachs believes the company is well-positioned for growth, particularly given its international expansion opportunity and its burgeoning app ecosystem. Combined, the broker believes Xero has a multi-decade runway for strong revenue growth.
Goldman Sachs currently has a buy rating and $153.00 price target on its shares.