S&P/ASX 200 Index (ASX: XJO) shares are great place to look for long-term investment opportunities.
Plenty of ASX 200 shares are market leaders in their industry. Owning the largest, best business in an industry can help generate stronger returns for our portfolios.
The best way to generate long-term returns is to invest for the long-term. So, here are three shares I think are opportunities for this year and beyond:
Share 1: REA Group Limited (ASX: REA)
REA Group is the owner of Australia's most popular real estate portal. The REA Group share price is still down 7% from where it was on 21 February 2020. That's despite the lower interest rate.
The ASX 200 share has a strong market position as the clear property leader in Australia. Potential property buyers will go to the site with the most properties for sale. Potential sellers will want to list on the site with the biggest buying audience. It's a very beneficial loop for REA Group.
There wasn't much volume of property listings during the worst period of the coronavirus lockdowns. But now there's more activity. Once jobkeeper ends in September there could be forced sellers, so more properties could come onto the market.
Over the long-term I'm excited by REA Group's stakes in overseas property sites in regions where the population is much higher than Australia. One property site services the US.
Share 2: Service Stream Limited (ASX: SSM)
Service Stream is an ASX 200 share that specialises in network infrastructure. It's involved in the designing, construction, maintenance and operation of networks like telecommunications, electricity, gas, water and 'new energy'.
The company had been consistently growing its earnings over the past few years before COVID-19. It's expecting to report another solid result in FY20. Federal, state governments and businesses plan to continue spending on infrastructure over the coming years which should be good for Service Stream. The construction of the new 5G networks should be helpful for earnings too.
Service Stream has also been steadily growing its dividend. The ASX 200 share offers a grossed-up dividend yield of 6.8%. That looks pretty good to me. The Service Stream share price is down 27% since 5 February 2020.
Share 3: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is my favourite ASX 200 share, so I had to include it. It's an investment conglomerate that takes long-term stakes in a variety of businesses like Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPM) and Bki Investment Co Ltd (ASX: BKI). It's also invested in unlisted businesses like swimming schools and agriculture.
The investment house itself makes long-term investment decisions, so I think it's easy to be a long-term investor in Soul Patts.
I like that it's a conservative investor, and contrarian when there are unloved opportunities. Investing in agriculture during one of Australia's worst droughts is the sort of brave investing that Soul Patts has done.
I believe Soul Patts has a great chance of outperforming the ASX 200 over the longer-term. The TPG merger is compelling. Brickwork's expansion into the US is exciting. Soul Patts is about to start investing in regional data centres in Australia.
Foolish takeaway
I think each of these ASX 200 shares have a great future. Service Stream could be the strongest performer over the next 18 months if Australia's economy keeps rebounding. But Soul Patts would be the share I'd buy today if I wanted a share to hold for many, many years.
