I like investing in shares for the long term. The fewer investment decisions, transaction costs, and capital gains tax I have to deal with, the better. That's why I'm attracted to set-and-forget ASX stocks – ones I could own for many years with confidence.
I'm not advocating that investors should just buy a bad investment and own it for a long time. I want to own good businesses that can unlock solid returns over time.
I've admired the three businesses below for a long time, and I believe they can make excellent investments over time. I'd be happy to let them just sit there and deliver.
Wesfarmers Ltd (ASX: WES)
I think Wesfarmers is one of the best operating companies on the ASX due to the businesses that it owns. The company is already many decades old, and it has built an enviable portfolio of names, including Bunnings, Kmart, Target, Officeworks, Priceline, Instantscripts, and plenty of others. This makes it a great set-and-forget ASX stock, in my view.
Over the years, Wesfarmers has proven to be skilled at allocating money towards investing in its own businesses, helping Bunnings and Kmart become the retailing juggernauts they are now, earning huge returns on capital (ROC). Additionally, Wesfarmers has made several strategic acquisitions to diversify and extend its earnings growth runway. Healthcare and lithium mining are two areas where it has focused recent expansion efforts.
With regular earnings growth and a rising dividend, this business is proving effective at generating long-term shareholder returns.
MFF Capital Investments Ltd (ASX: MFF)
This business is best known for its listed investment company (LIC) operations, as it aims to deliver investment returns for shareholders by targeting high-quality global shares that have strong competitive advantages and look capable of delivering pleasing compound growth over the long term.
MFF's portfolio of names like Mastercard, Visa, Microsoft, Alphabet, Meta Platforms, and Amazon has performed strongly, allowing the business to pay a steadily rising dividend to shareholders.
I like how this set-and-forget ASX stock is able to change its portfolio as it sees new opportunities, or take some profit off the table. In five years, the outlook for MFF could be just as appealing as it is now. It currently has a grossed-up dividend yield of around 5%, including franking credits.
APA Group (ASX: APA)
APA is one of the largest energy businesses in Australia, with a major gas pipeline network spanning the country, transporting approximately half of the nation's gas usage. It also has electricity transmission assets, wind farms, solar farms, and other gas-related energy infrastructure.
The Australian Federal Government has indicated that gas will play an important role in the energy mix for decades, making APA's pipelines a very useful long-term asset base.
This set-and-forget ASX stock continues to invest in expanding its energy portfolio, particularly by constructing new pipelines and buying electricity-related assets.
It has increased its annual distribution every year for two decades, and I'm expecting this record to continue for the foreseeable future. It's expecting to pay a distribution yield of approximately 6.5% in FY26.
