Owning a house and passing it onto the next generation can make a huge difference to how their lives play out. However, while a house can go up in value, houses that we live in don't make operating profits like ASX stocks do.
That's one of the best things about owning parts of businesses, they are generating earnings and doing their best to make more money for shareholders in the coming years. This can lead to rising share prices and growing dividend payments.
The investments I'm going to refer to are set up to perform well over the long-term. I think they are set to perform well over the next five years, ten years and even 20 years.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
I think this business has already proven itself to be an excellent wealth builder for investors. The investment conglomerate has been around for many decades, with its diversified portfolio spread across assets like telecommunications, resources, building products, industrial properties, financial services, agriculture, swimming schools and plenty more.
The company points out that over the 25 years to 30 May 2025, it returned 3x the All Ordinaries Accumulation Index (ASX: XAOA) return, generating a total return of 2,055% compared to 682% for the index.
With the business regularly putting additional money into new investment opportunities, I believe this company can continue growing for a very long time to come. Plus, it has increased its annual ordinary dividend per share at a compound annual growth rate (CAGR) of 9.8% since 2000, according to the ASX stock. That's a great source of cash flow for investors.
In a decade, I expect the ASX stock will be significantly larger, paying bigger dividends and making more profit for shareholders
MFF Capital Investments Ltd (ASX: MFF)
MFF is an investment business that aims to "build lasting wealth for shareholders primarily through long-term ownership of advantaged businesses". It takes a long-term view and focus on a select group of businesses that offer attractive combinations of quality and value. It's able to invest where it sees the greatest potential for sustainable compounding.
The business says that almost all of the companies within its portfolio are benefiting from investments in AI in technology, which seems to be the way the world is going. Some of its largest holdings include Alphabet, Mastercard, Visa, Bank of America, Meta Platforms, American Express, Amazon and Microsoft.
I am optimistic MFF's existing portfolio can perform well and that the investment team there can identify future winners to own for the long-term. According to CMC Markets, MFF Capital has delivered an average total shareholder return of 15.5% per year over the last five years.
As a bonus, the ASX stock has increased its annual ordinary dividend per share every year for the last several years and at the time of writing has a grossed-up dividend yield of 5.2%, including franking credits.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
The last investment I want to tell you about is this exchange-traded fund (ETF) which aims to invest in some of the most compelling businesses in the US stock market, which is where many of the world's best businesses can be found listed, with the benefit of their international, if not global, operations which are generating profit. I'm calling this an ASX stock because we can buy it on the ASX.
There are two main elements that decide whether businesses are chosen for this fund.
First, it only considers businesses for the portfolio that have wide economic moats. An economic moat means a business has competitive advantages in some form like cost advantages, network effects, intellectual property and so on. The 'wide' part of its name refers to how the analysts look for advantages that are more likely than not to endure for at least two decades.
Second, the analysts only invest if they think it's trading at good value. That powerful combination has led to the fund delivering an average annual return of 14.8% per year over the last 10 years. I think it can continue to perform strongly in the years ahead.
