There are some very old businesses on the ASX. Some of the ASX shares are more than 100 years old. But are these oldies a buy?
Surviving for over a century is no easy feat. There have been world wars, pandemics, economic collapses and so on.
Being that old may suggest staying power. Depending on the sector, some businesses may be expecting demand for their products or services to last at least decades longer.
Here are two of the oldest businesses in Australia:
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Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Pattinson was first listed in 1903 as a pharmacy business.
However, the business has long since diversified away from being a pharmacy company.
Its holding of Brickworks Limited (ASX: BKW) shares has been a holding for decades and now is giving Soul Pattinson a growing exposure to high-quality industrial property.
The old ASX share has a number of other investments in different businesses and sectors like TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC), Pengana Capital Ltd (ASX: PCG), Bki Investments Ltd (ASX: BKI), Ampcontrol, swimming schools, resources, financial services and agriculture.
After a merger with the listed investment company (LIC) Milton, it has a lot of liquidity for more investment opportunities in areas like the energy transition and education.
Soul Pattinson has paid a dividend to shareholders every year since it listed (in 1903) and has increased its dividend every year since 2000.
Whilst the broker Morgans currently rates the ASX share as a hold, the price target of $36.78 is around 20% higher than it is today.
BHP Group Ltd (ASX: BHP)
Incorporated in 1885, BHP engaged in the discovery, development, production and marketing of iron ore, copper, oil and gas, diamonds, silver, lead, zinc and a range of other natural resources.
These days, its portfolio is more focused with iron ore, nickel, copper and metallurgical coal (used to make steel). It's on track to divest its petroleum business to Woodside Petroleum Limited (ASX: WPL), reducing its exposure to fossil fuels.
The ASX share is now trying to expand its exposure to future-focused commodities such as its potash Jansen asset in Canada which has a long life and could earn high margins.
Are BHP shares are a buy? The brokers at Macquarie Group Ltd (ASX: MQG) think so. It's rated as a buy with a price target of $52. That's a potential upside of around 20% over the next year.
Macquarie is seeing an improvement in steel demand in China, which could help BHP.
The broker likes the diversification and cashflow of BHP. On Macquarie's numbers, the BHP share price is valued at under 10x FY22's estimated earnings with a projected grossed-up dividend yield of 13%.
