The ideal Australian stocks to buy and hold forever

Some investments are exciting because of what might happen over the next year.

Others are interesting because of what could happen over the next decade.

But the very best businesses often share a different characteristic. They are the types of companies investors can buy, hold, and largely forget about while the business quietly keeps growing in the background.

These are usually companies with competitive advantages, strong management teams, and the ability to adapt as the world changes.

If I were looking for Australian stocks that could potentially be held for decades rather than years, three that immediately come to mind are in this article.

Wesfarmers Ltd (ASX: WES)

One reason Wesfarmers stands out as a long-term holding is its ability to evolve.

Over the decades, the company has owned everything from coal mines to fertiliser businesses to hardware stores. Yet management has consistently shown a willingness to reshape the portfolio when better opportunities appear.

Today the group is anchored by high-quality retail businesses such as Bunnings, Kmart, and Officeworks. These are brands with strong market positions and significant scale advantages in their categories.

What makes the company particularly compelling is its disciplined capital allocation. Wesfarmers has a long history of selling businesses when the price is right and reinvesting that capital into new growth opportunities.

That flexibility has allowed the company to keep reinventing itself while continuing to generate attractive returns for shareholders.

Macquarie Group Ltd (ASX: MQG)

Macquarie is another Australian stock that has built a reputation for long-term value creation.

Unlike traditional banks, Macquarie operates across a wide range of financial services including asset management, infrastructure investment, commodities trading, and advisory.

What sets the business apart is its global reach. A large portion of Macquarie’s earnings are generated outside Australia, which gives it exposure to infrastructure, energy, and capital markets opportunities around the world.

Another key strength is its culture of identifying emerging investment themes early. Over the years, the company has built major businesses in areas such as infrastructure funds, renewable energy investment, and commodities trading.

That ability to evolve with global markets has helped Macquarie grow from a relatively small Australian investment bank into one of the most influential financial institutions in the world.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne represents a very different type of business but shares one crucial trait with the others: longevity.

The company develops enterprise software used by governments, universities, and large organisations. These systems manage critical functions such as finance, payroll, and operations.

Once these platforms are embedded, they tend to stay in place for many years because switching software systems can be expensive and disruptive.

TechnologyOne has spent years transitioning its business toward a cloud-based software model, which provides annual recurring revenue and stronger long-term customer relationships.

As more organisations migrate their systems to the cloud, the company continues to expand both its customer base and its recurring revenue streams.

That combination of sticky customers and predictable income is one reason the business has delivered consistent growth over many years.

Foolish takeaway

Buying and holding shares for decades requires confidence that a business can adapt, grow, and remain relevant over time.

Wesfarmers, Macquarie Group, and TechnologyOne operate in very different industries, but each has demonstrated an ability to evolve while continuing to deliver strong results.

No company is guaranteed to succeed forever. But I think businesses with competitive advantages, strong leadership, and long-term growth opportunities often give investors the best chance of building wealth over many years.

The post The ideal Australian stocks to buy and hold forever appeared first on The Motley Fool Australia.

More reading

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• 3 reasons why the Wesfarmers share price is a buy
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• New to investing? Start with ASX ETFs and quality ASX stocks
• Where I’d invest $10,000 in ASX 200 blue-chip shares right now

Motley Fool contributor Grace Alvino has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group, Technology One, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Technology One and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.