2 ASX shares that could be top buy and hold options

Could these ASX shares generate strong returns over the long term?

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Arguably one of the best ways to generate wealth is to make long term investments. This is because by investing for long periods, it allows you to benefit from compounding.

But which shares would make good buy and hold investment options? Two to consider are listed below. Here's why they are rated highly:

CSL Limited (ASX: CSL)

CSL is one of the world's leading biotherapeutics companies and the name behind the CSL Behring and Seqirus businesses. CSL Behring is the global leader in plasma therapies, whereas Seqirus is the second largest influenza vaccines business.

Both businesses have been growing strongly in recent years and have been tipped to continue doing so in the future. This is due to their leading therapies and vaccines, increasing demand, and lucrative research and development pipelines.

In respect to the latter, CSL invests in the region of 11% of its sales into its research and development activities each year. This ensures that it has a pipeline of cutting-edge therapies with significant sales potential. One of those is clazakizumab, which is being developed to treat kidney transplant rejection. This product alone could generate peak sales of US$5.4 billion.

UBS currently has a buy rating and $330.00 price target on CSL's shares.

Xero Limited (ASX: XRO)

Xero is leading cloud-based business and accounting solution provider to small and medium sized businesses. It offers businesses and their advisors a solution that provides deep cloud accounting functionality together with an ecosystem of over 800 third-party app partners to provide valuable access for small businesses to add point solutions where needed.

This offering is resonating extremely well with businesses across the world, underpinning very strong recurring revenue growth in recent years.

Pleasingly, the company still has a significant market opportunity to grow into. Management estimates that its total addressable market is worth NZ$45 billion at present and growing. This compares to FY 2021's operating revenue of NZ$848.8 million.

Goldman Sachs believes the company is well-positioned for growth, particularly given its international expansion opportunity and its burgeoning app ecosystem. Combined, the broker believes Xero has a multi-decade runway for strong revenue growth.

Goldman Sachs currently has a buy rating and $153.00 price target on its shares.

James Mickleboro does not own any shares mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. and Xero. The Motley Fool Australia owns shares of and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Blue Chip Shares

Happy man working on his laptop.
Blue Chip Shares

3 ASX blue chips to buy before earnings season

Analysts recently named these shares as buys. Let's see what they are recommending.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Blue Chip Shares

2 of the best ASX 200 blue chip shares to buy now

Bell Potter sees these as the creme de la creme right now.

Read more »

Person holding a blue chip.
Opinions

Buy alert! 2 ASX 200 blue-chip shares worth a look now: expert

Dylan Evans from Catapult Wealth has identified two blue-chip shares that he thinks are good buys today.

Read more »

A group of young friends celebrating and toasting with beers
Blue Chip Shares

This beaten-down ASX 200 stock could be a turnaround story

Let's see if analysts think this stock is a buy after its heavy decline.

Read more »

A young woman sits on a sofa in a stylish home with her laptop computer balanced on her knee and smiles with a satisfied look on her face at what she's seeing on the screen.
Blue Chip Shares

2 ASX blue-chip shares offering big dividend yields

These stocks could provide strong passive income.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Blue Chip Shares

3 ASX 200 blue chip shares to buy with $3,000 in July

Analysts have recently named these well-known stocks as top buys.

Read more »

Two people having a meeting using a laptop and tablet to discuss Seven West Media's balance sheet
Blue Chip Shares

3 fantastic ASX shares to buy for an SMSF

Let's see why these shares that brokers rate as buys could be top picks for super investors.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Blue Chip Shares

Buy these fantastic ASX 200 blue chips with $10,000

Analysts think these top stocks are buys right now.

Read more »