It's often said that the best time to invest is forever. I think investing in ASX shares for the long term makes a lot of sense.
Investing for the long term allows us to benefit from the growth potential of our investments as they become a reality. Long-term investing can also reduce the number of sales and minimise capital gains tax events, keeping more of an investor's funds inside their portfolio rather than handing some of the crystallised gains over to the ATO.
But which ASX shares are good candidates for a buy-and-hold forever strategy? I'd normally write about a business like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) in an article like this, but I'll cover two other names today.
Propel Funeral Partners Ltd (ASX: PFP)
While it's a morbid suggestion, Propel is the second-largest provider of 'death care' services in Australia and New Zealand. It operates from close to 200 locations, including 38 cremation facilities and nine cemeteries.
The long-term tailwind of Australia's rising and ageing population is, according to the company and ABS statistics, leading to an increasing number of deaths. Propel said the number of deaths is the "most significant driver of revenue in the death care industry."
ABS stats show that death volumes grew by 0.9% per annum between 1900 and 2019. The death volume is expected to increase by an average of 2.5% per annum from 2024 to 2030 and then rise by 2.9% per annum between 2030 to 2040.
Additionally, the company is benefiting from the steady inflation of funeral prices, which is boosting revenue. According to the ASX share, its average revenue per funeral has increased at a compound annual growth rate (CAGR) of 3.2% since FY15.
I also like that the business is making acquisitions to grow its geographic presence and scale.
If the ASX share can benefit from rising funeral volumes, implement slow-but-steady price rises and grow profit, I think Propel can keep growing its profit and dividend for a long time to come, though growth every single year isn't certain.
Centuria Industrial REIT (ASX: CIP)
This is one of my preferred real estate investment trusts (REITs). It owns high-quality industrial properties (such as distribution centres), predominantly in important metropolitan locations.
Owning commercial land within cities has been a useful asset for hundreds/thousands of years, and I don't think that's going to change within my lifetime.
In fact, there has been a significant increase in demand for commercial property in the last few years because of the increase in e-commerce adoption, a growing population, and the onshoring of supply chains after COVID disruptions.
Due to that demand, Centuria Industrial REIT is benefiting from impressive rental growth on its new rental contracts. In the first quarter of FY25, it said it achieved positive re-leasing spreads of 54%. The ASX share's rental income is receiving a major boost from these new leases.
I like the fact that the business is active with development and repositioning projects, which helps it maximise its land usage for investors.
The ASX share is currently trading at a 21% discount to the net tangible assets (NTA) at 30 June 2024, which I believe is an appealing valuation. It's expecting to pay a distribution yield of 5.3% in FY25. Both of those financial statistics are very appealing to me.
