I think there are some ASX shares that could be worth investing in for the next decade.
These businesses have long term goals and they could potentially make very good returns for investors if their plans come to fruition.
Here are my two ideas:
Magellan Financial Group Ltd (ASX: MFG)
Magellan is one of the biggest funds management businesses in the country. It has grown a lot over the last decade and I think the upcoming decade could also be a good one. There is only a select group of businesses that provide large amounts of outperformance in the overall market. Magellan seems to have very good leadership and a long term strategy to keep that going.
The company’s funds have a record of outperformance compared to the index over the long term, whilst not taking large investment risks. This attracts many investors who want good returns, but don’t want very high levels of volatility. This is one of the main reasons why I think Magellan’s funds under management (FUM) can continue to grow over the coming years. The businesses it invests in – global market leaders of various industries – is likely to produce good long term returns for investors (and also achieve good organic FUM growth).
It’s the planned growth that particularly attracts me to this ASX share right now, as well as the recent share price weakness of Magellan.
Magellan is planning on launching a retirement product that could attract a lot of future retiree money that want a decent return from their capital.
The other area that could make Magellan a good performer over the next decade is its investments in operating businesses including new investment bank Barrenjoey and Mexican outlet chain Guzman y Gomez. Both of these businesses are early on with their respective growth journeys, but they could do well over the long term. Perhaps this is a sign that Magellan is looking to turn into a sort-of Berkshire Hathaway. That opens up a much larger growth runway if it continues to invest in other businesses.
Magellan is priced at 16 times the estimated earnings for the 2023 financial year, according to CommSec numbers.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is another ASX share that I really like for the long term. The core business is doing splendidly well right now. In the last result, the FY21 interim result, operating revenue jumped 53% and the EBITDAF margin (EBITDA explained – the F stands for foreign currency) rose from 17% to 31%. When you combine great revenue growth with excellent operating leverage then you can get very good long term results.
Over the long term, Pushpay has a goal of reaching a 50% market share of large and medium US churches which could translate to US$1 billion of revenue per year. Pushpay’s margins could be much higher if its revenue reaches US$1 billion, or even just US$500 million.
There are plenty of different growth avenues that Pushpay can pursue. It can take its same system to smaller churches in the US. Pushpay can expand to different countries such as Central and South American areas. It can also grow in other donation sectors like education and other non-religious areas.
Pushpay is priced at 23 times the estimated earnings for the 2023 financial year, according to CommSec numbers.
Other ASX growth shares that could be solid performers over the next decade include Brickworks Limited (ASX: BKW), Redbubble Ltd (ASX: RBL) and EML Payments Ltd (ASX: EML).
