There are some very appealing ASX shares that I'm optimistic can deliver strong long-term returns from the current level.
I want to focus on businesses I believe can deliver excellent operational results, which can then translate into pleasing shareholder returns.
Due to the growth outlook of the companies covered below and their current valuations, I'm expecting to invest in the following ASX shares within the next couple of months.
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Guzman Y Gomez Ltd (ASX: GYG)
I'm already a shareholder of Guzman Y Gomez shares and I'm thinking about buying more following its recent decline. As the chart below shows, it's down more than 30% in 2025 to date.
The Mexican restaurant business is delivering growth and expects a lot more to come.
In the FY25 third quarter, the business delivered impressed sales growth – network sales increased 23.6% year-over-year to $289.5 million. Within that network sales total, Australian sales grew 23% to $267.6 million, Singapore sales increased by 34% to $16.6 million, Japan sales rose by 23.5% and US sales grew by 23% to $3.2 million.
The business is delivering this growth through a combination of both additional restaurants and strong existing restaurant sales.
In the FY25 third quarter, its Australian restaurant count increased by 26 to 211 locations, while the non-Australian restaurant count grew by five to a total of 30. GYG is aiming for 1,000 Australian restaurants over the next two decades and I believe the international segment can grow significantly over the next 10 to 20 years as well. Time will tell how large the international restaurant segment can become, but I'm very optimistic considering the success it's seeing in Asia.
Its existing store network is performing very well. The Australian, Japanese and Singaporean comparable sales growth was 11.1% year-over-year in the FY25 third quarter. I think this bodes very well for rising profit margins thanks to operating leverage.
Despite plans for the ASX share to invest heavily in opening new restaurants in the coming years (including the costs of that), it's priced at 30x FY29's estimated earnings.
Global X S&P World EX Australia GARP ETF (ASX: GARP)
This is one of the most compelling ASX-listed exchange-traded funds (ETFs), in my view.
It aims to combine the concept of investing in great businesses with good growth prospects at a good price.
On the quality side of things, it looks at the financial leverage (debt levels) and the return on equity (ROE) of a business. A high ROE says the business makes a high level of profit on shareholder money retained within the business.
On the growth element, the ASX ETF looks at the three-year sales per share growth and earnings per share (EPS) growth.
Finally, when considering the value of an investment, it looks at the earnings to price ratio, which is another way of calculating the price to earnings (P/E) ratio.
The fund has a portfolio of 250 companies spread across multiple countries and countries, so I think it very effectively ticks the diversification box. I'm calling this an ASX share because we can buy it on the ASX.
While past performance is not a very reliable indicator of future returns, the index that the GARP ETF tracks has delivered an average of 19.5% per year.
