2 ASX shares to buy and hold for the next decade

I'm bullish about the long-term potential of these businesses…

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Key points

  • There are benefits of long-term investing with a focus on compounding for ASX shares, highlighting TechnologyOne Ltd and Guzman Y Gomez Ltd as promising investments.
  • TechnologyOne is poised for growth with plans to increase annual recurring revenue to $1 billion by FY30 and expand in the UK market, driven by its successful enterprise resource planning software.
  • GYG aims to grow its restaurant presence significantly, with plans for 1,000 locations in Australia and ongoing international expansion, leading to strong sales growth across regions.

I'm a big believer that long-term investing is the best way to think about putting money into ASX shares.

Allowing compounding to work its magic for a longer period of time is more likely to deliver good wealth-building.

There are not that many ASX share investments that I'd be willing to invest in today for the next decade. However, the two I'm about to highlight are ones I've invested my own money into with the intention of holding them for at least the next 10 years.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is one of the best software businesses on the ASX, in my view. The enterprise resource planning (ERP) technology it provides is used by businesses, government agencies, local councils and universities.

Its software is clearly resonating with subscribers because it has a very low customer loss rate each year and it regularly wins new subscribers.

The UK is a key market for future growth which, like Australia, has businesses, government agencies, local councils and universities. In FY25, it won key London boroughs of Islington and Greenwich from global incumbent competitors.

It is also winning subscribers in the education sector, including TasTAFE.

The business reports that customers continue to adopt more TechnologyOne products and modules as they embrace its "enterprise vision and the consequent substantial efficiencies and productivity gains."

The ASX share is aiming to reach total annual recurring revenue (ARR) of $1 billion by FY30, compared to $554.6 million at the end of FY25. I think the ARR could rise even further beyond FY30.

It aims to deliver a net revenue retention (NRR) of 115% each year, implying 15% revenue growth from the existing client base each year. This level of growth helps the business double its revenue every five years.

TechnologyOne is also expecting to grow its profit before tax (PBT) margins in the coming years, despite investing heavily in research and development (R&D) to unlock more growth.

The TechnologyOne share price is valued at 51x FY27's estimated earnings, according to the forecast on Commsec.

Guzman Y Gomez Ltd (ASX: GYG)

GYG is a Mexican food restaurant with big plans for how many locations it wants to have in the coming years.

At the end of the first quarter of FY26, it had 227 Australian restaurants, of which 84 were corporate and 143 were franchised. Excitingly, the business has a goal of reaching 1,000 Australian restaurants within 20 years.

The ASX share is expecting to open 32 new restaurants during FY26 in Australia and I'm expecting plenty more over the next decade.

In the coming years, the international division could also be an integral part of the company's earnings and total network. At the end of the FY26 first quarter, it had 22 Singapore locations, five Japan restaurants and seven US locations.

GYG is growing sales strongly. The first quarter of FY26 saw 17.4% Australian network sales growth to $305.5 million, 29.2% Asian network sales growth to $20.8 million and 65.4% US network sales growth to $4.3 million.

With growing scale, I'm optimistic the business can deliver rising profit margins alongside the growing network sales.

According to the forecast on Commsec, the business is valued at 46x FY28's estimated earnings, at the time of writing.

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez and Technology One. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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