With global markets experiencing numerous bouts of volatility over the past month or two, and inflation rearing its ugly head across many advanced economies, it's fairly safe to say many investors have spent 2022 so far reassessing their share portfolios. As inflation rises and the prospect of higher interest rates grows ever closer, tech and growth shares on the ASX, as well as on the US markets, have been suffering. Uncertainty is rarely a comfort for companies with long and uncertain growth runways. And that mostly includes growth shares, especially in the tech space. So what are investors looking to counter this weakness in growth shares with? ASX value shares have proved to be strong candidates.
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Growth and value
According to the index provider S&P Global, which runs the S&P/ASX 200 Value Index, 'value shares' are selected using three criteria: the ratios of book value, earnings, and sales to price. Unfortunately, S&P Global only gives us the top 10 shares in its index. But let's look at some ASX shares that could be described as value shares using the metrics listed above, that have been quietly but significantly gaining over the last 10 years.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is one. Soul Patts, as it's more easily known, is an industrial conglomerate that owns large chunks of other ASX shares for the benefit of its investors. These include Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPG) and New Hope Corporation Limited (ASX: NHC). Soul Patts has indeed been growing quietly but significantly for the past decade. Not only has it jacked up its dividend every single year, but its share price has gone from just over $13.60 ten years ago to today's $26.21 at the time of writing. That's a 10-year return of close to 100%. Throw in the dividends, and we have a consistent grower here.
Commonwealth Bank of Australia (ASX: CBA) is another value share, and is actually a top 10 constituent of the S&P/ASX 200 Value Index. Although a little more volatile than Soul Patts, CBA shares have also been a pretty good share to own over the past decade. Its share price has risen from just under $50 a decade ago to today's pricing of $98.57. That's also a gain of around 100%. And of course, CBA has been forking out generous dividends for most of that time too.
One more ASX value share for the road
Our final value share to check out is none other than Brickworks, the company Soul Patts owns a large stake of. Brickworks is a building materials supplier but also owns some valuable real estate. It has also been able to quietly but consistently grow over the past 10 years. Back in February 2012, Brickworks was worth around $10.70 a share. Today, it's asking $22.27. That's growth worth around 110% over those 10 years. Brickworks has also been an incredibly consistent dividend payer. It hasn't cut its dividend for decades. Add that to those returns, and you would have some very happy long-term shareholders.
So there you have it, some quiet but consistent ASX value shares that would have enjoyed a very happy place in most investors' portfolios. Value shares might not have the flashy gain that growth shares can offer. But you can't fault too many of them for slow, consistent growth (not to mention income).
