There are over 2,000 shares available to buy on the ASX, so choosing which ones to entrust with your hard-earned cash can be challenging. Today, I'm taking a closer look at three ASX shares that I think are worth investing in for the long term.
Of the three, I recently invested in two of them for my own portfolio. And if someone gave me $10,000 to invest today, I'd put some more money into these companies, plus an ASX exchange-traded fund (ETF).
I'm a fan of buying growing businesses that have seen temporary share price falls because it allows me to invest at a cheaper price/earnings (P/E) ratio. When it comes to buying companies with good growth prospects at a reasonable price, here's why I really like these three:
Collins Foods Ltd (ASX: CKF)
The Collins Foods share price has dropped by around 25% since 9 January this year, making the ASX 200 stock my favourite pick right now.
The business is a major KFC operator, with growing outlet numbers in Australia, the Netherlands, and Germany. Collins Foods is also responsible for Taco Bell restaurants in Australia, with 27 outlets at the last count.
KFC has been a strong brand in the fast food world for decades, but it doesn't have the same geographic reach as McDonald's. As such, I believe Collins Foods has plenty of room for growth in the years ahead if it just keeps adding to its network in Australia and Europe. The company's KFC network grew by four locations in Australia and eight locations in the Netherlands in the first half of FY24.
The combined Dutch and German populations are over 100 million, but the company's European revenue was less than a third of Australia's revenue in HY24. Therefore, I think the ASX consumer stock has a long growth runway in Europe.
The business is achieving pleasing operating leverage, with rising profit margins, enabling net profit to grow quicker than revenue. HY24 revenue rose 14.3%, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 16.7%, and underlying net profit after tax (NPAT) went up 28.7%.
Impressively, the business has grown its dividend every year since 2014, and it currently has a grossed-up dividend yield of 4.2%. According to Commsec, the Collins Foods share price is valued at just 12x FY26's estimated earnings.
Corporate Travel Management Ltd (ASX: CTD)
Corporate Travel is one of the largest corporate travel operators in the world.
The Corporate Travel Management share price has dropped by around 30% from 29 January 2024, as displayed on the chart below.
However, the long-term outlook for the business is very compelling, in my opinion. Management hopes to win at least $1 billion of new client work each year for the next few financial years.
Corporate Travel plans to grow its revenue (organically) by at least 10% per annum over the next five years. According to the company, its operating leverage can also help boost EBITDA by 15% per annum in the next five years.
Furthermore, if the ASX 200 company makes any acquisitions in the near future, there's potential for revenue growth in addition to the numbers above. At the current Corporate Travel Management share price, it's valued at just 12x FY26's estimated earnings.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This ASX ETF focuses on US companies with strong, sustainable economic moats, or competitive advantages, which are expected to last for many years.
Competitive advantages can take many forms, including network effects, cost advantages, brand power, intellectual property, and so on.
To make it into this ETF's portfolio, businesses must be priced attractively compared to what Morningstar analysts think they're worth. Examples of companies currently held by MOAT include Nike, Etsy, Campbell Soup, and Alphabet (Google).
With a portfolio full of good-value, competitively-advantaged companies, I'm optimistic this fund can continue its winning streak.
The ASX ETF has performed strongly over the long term, delivering an average annual return of around 15% over the past five years.
