2 ASX shares I will 'never' sell

I plan to own these two businesses for the rest of my life.

| More on:
A businessman hugs his computer and smiles.

Image source: Getty Images

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

Key points

  • Long-term investing is a really effective investment strategy
  • Rural Funds is a farmland property owner paying attractive income
  • Soul Pattinson owns a large, diversified portfolio

There are a few ASX shares in my portfolio that I'm planning to hold forever.

In March 2017, over six years ago, I wrote an article about some of the ASX shares that I owned and planned to hold forever. In this article, I'm going to write about two of those same businesses – I still own them and still plan to own them forever. I'm going to tell you why.

Rural Funds Group (ASX: RFF)

Rural Funds is still an agricultural real estate investment trust (REIT) that owns a portfolio of farms that it leases out to high-quality tenants.

With its cattle, almonds, cropping, vineyards and macadamias farms, it has tenants like JBS, Australian Agricultural Company Ltd (ASX: AAC), Olam, Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: TWE).

The Rural Funds share price has sunk 35% over the past year, which seems like an overreaction to me considering farmland property values are still doing well despite the impacts of interest rate rises.

The Australian and global populations are still growing and will need an increased amount of food. Australian food is usually high-quality and Australia has been described as Asia's food bowl because of all of the food exports. That's a good driver for future farm values, in my opinion. We all need food – I can't see that changing in my lifetime.

Rural Funds' rental income continues to grow, which can offset the higher interest costs. But, it has hedged a lot of its debt to be at a manageable interest rate level.

The ASX share recently released a newsletter to say that "cash profits have recovered and are forecast to increase again next financial year (FY24). Despite the current higher interest costs, RFF has grown rental revenues at a faster rate, primarily through entering a 40-year agreement to lease 3,000 hectares of its macadamia developments."

Rental income growth and attractive distributions make me confident to hold this investment for decades to come.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

This is one of the oldest businesses on the ASX – it was listed 120 years ago and has paid a dividend every year since.

The ASX share started off as a pharmacy business but has since turned into the largest investment company on the ASX.

It's invested across a variety of sectors, including telecommunications, financial services, building products, resources, agriculture and swimming schools.

Some of the ASX share's biggest holdings include TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC), Brickworks Limited (ASX: BKW), Tuas Ltd (ASX: TUA) and Macquarie Group Ltd (ASX: MQG).

Since the acquisition of the investment company Milton, Soul Pattinson's diversification has increased. The company is rapidly growing a sizeable structured yield/debt portfolio, including an international credit portfolio it recently invested in.

Its ability to adjust and improve the portfolio with additional investments (and divestments) means it can future-proof itself over time. It's the ASX share that I'm most certain I will own in another 50 years. The steadily growing dividend is a useful bonus.

Motley Fool contributor Tristan Harrison has positions in Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Tpg Telecom and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

Happy young couple saving money in piggy bank.
Opinions

Want to start investing in ASX shares? Here's what I'd buy

This is where I’d begin to put my money in the stock market.

Read more »

People of different ethnicities in a room taking a big selfie, symbolising diversification.
Opinions

Want diversification? Get it instantly with these ASX 200 shares

Some businesses offer a lot more diversification than others.

Read more »

A happy man and woman on a computer at Christmas, indicating a positive trend for retail shares.
Opinions

2 ASX 200 shares I'd want to receive as a present today

Merry Christmas! Are there any stocks under your tree?

Read more »

Young boy in business suit punches the air as he finishes ahead of another boy in a box car race.
Opinions

Why I think these 2 ASX 300 stocks will beat the market in 2025

I’m very optimistic about a few ASX growth shares.

Read more »

A businessman compares the growth trajectory of property versus shares.
Opinions

What's the outlook for shares vs. property in 2025?

The experts have put out their new year predictions...

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Opinions

My ASX share portfolio is up 30% this year! Here's my plan for 2025

The best investing plans shouldn't need too many updates.

Read more »

Man in an office celebrates at he crosses a finish line before his colleagues.
Opinions

These stocks made my share portfolio a market-beater in 2024

Beating the market is the least important takeaway from this year.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

2 underappreciated ASX 200 shares to buy now

Investors may be undervaluing these ASX 200 shares heading into 2025, according to this expert.

Read more »