The S&P/ASX 200 Index (ASX: XJO) has been through pain lately, down 9% from 14 February. I get very excited by the prospect of cheaper businesses because it means I can buy my favourites at better value. There are some ASX forever stocks that look too good to ignore.
I've been active this week to take advantage of the cheaper prices we're seeing amid market worries about tariffs and slower growth.
I believe it helps to focus on investments we'd be happy to buy more of if the price fell. That way, a bear market can be seen as an exciting buying opportunity rather than something to fear.
With that in mind, I'd highlight at least two ASX forever stocks right now.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
In my eyes, Soul Patts could be the ultimate forever ASX 200 stock.
One of the difficulties in committing to a company forever is that we can't know whether its product will fall out of favour, or if the entire industry will go through a permanent downturn.
Look at what happened to names like Blackberry, Blockbuster, Masters (a Bunnings challenger), ABC Learning Centres, and HIH Insurance.
Soul Patts has been on the ASX for 120 years. It has various investments across a range of sectors and the flexibility to expand into other industries where it sees long-term opportunities. In recent years, it has expanded into areas like swimming schools and agriculture.
It has been in some sectors for decades, such as telecommunications, resources, building products, and property.
Each year, the investment portfolio pays Soul Patts cash flow, which the ASX forever stock uses to pay its operating expenses, fund a higher dividend payment, and invest for further opportunities.
Impressively, it has grown its annual ordinary dividend every year since 2000, and I'm expecting further dividend growth in the next few years. It currently has a grossed-up dividend yield of 4.2%, including franking credits.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is one of my favourite ASX retail shares with its excellent Kmart and Bunnings businesses, which I'd describe as category leaders. Both of them earn an impressive return on capital (ROC), have strong market positions, and provide good value for customers.
I think they've shown their quality in the last five years during COVID and high inflation – they've demonstrated they can grow sales and profit in various economic environments.
Why is this business a forever ASX stock? Firstly, the business can trace its roots back over 100 years, so it already has significant longevity.
For me, aside from the quality of its existing businesses, it's that it is willing to look at new sectors for opportunities, such as healthcare and lithium mining.
By being willing to change its operations over time and focus on new, long-term industries, Wesfarmers can future-proof itself rather than being stuck in the same industry. It only took full control of Bunnings in 1994, showing some of its best businesses in the future could be acquisitions.
In 20 years, I imagine the Wesfarmers business portfolio will look different, but I'm confident management will make the right moves to protect and grow shareholder capital. For example, closing Bunnings UK and Ireland, and Catch, were economically painful decisions, but probably for the best over the long-term.
As a bonus, the business has a grossed-up dividend yield of 4.1%, including franking credits.
