2 top ASX shares to buy and hold for the next decade

I think the best time period to invest for is the long term. That gives the ASX share investment the most time to come good, partly thanks to the power of compounding.

But, I wouldn’t invest in something for 10 years just to hold it a long time; I want to own investments that could provide great returns.

So, I’m going to outline two ideas that I’m optimistic can deliver strong earnings growth and great returns in that time.

Guzman Y Gomez Ltd (ASX: GYG)

GYG is a fast-growing Mexican restaurant business with over 240 locations in Australia, as well as a few restaurants in Japan, Singapore, and the US.

The company has a goal to increase its Australian restaurant network to 1,000 locations within 20 years, which would essentially be a quadrupling of its size.

Not only could that lead to a big rise in network sales, but it will hopefully mean stronger profit margins thanks to scale benefits.

GYG’s network sales are growing at an impressive pace – in the third quarter of FY26, the company generated total network sales growth of 19.5% to $345.9 million, with Australia and Asian comparable network sales growth of 6.6%.

We’re seeing the ASX share’s rising profitability come through in the company’s Australia and Asia segments’ underlying operating profit (EBITDA) margin as a percentage of network sales, which is predicted by the market to improve to between 6% to 6.2%, up from 5.7% in FY25.

In subsequent years, I expect the ASX share’s EBITDA margin will continue to rise, particularly if comparable sales continue to be a solid double-digit percentage each year.

According to the forecast on CommSec, the GYG share price is valued at 39x FY28’s estimated earnings at the time of writing.

Global X S&P World Ex Australia GARP ETF (ASX: GARP)

This is an exchange-traded fund (ETF) that aims to invest in the most compelling shares globally. It invests in 250 companies that are spread across multiple countries and sectors, giving it good diversification.

The investment strategy of the fund is to buy companies with robust earnings growth and solid financial strength, trading at reasonable valuations. In other words, a high level of growth at a reasonable price (GARP).

On the growth side of things, these businesses have a strong level of growth in terms of 3-year sales per share and earnings per share (EPS) growth. They also have low levels of debt and a high return on equity (ROE). Finally, the price-earnings (P/E) ratio is appealing for that level of growth.

Past performance is not a guarantee of future performance, but the index that this ASX ETF tracks has delivered an average return per year of 16.4%. If it can continue outperforming the global share market (and ASX share market) over the long term, I think it’ll be a great investment to own for the long term.

The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

More reading

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• 2 ASX shares that I rate as buys today for both growth and dividends!
• Is this going to be the best-performing ASX ETF for the next decade?
• Buy, hold, sell: Collins Foods, Domino’s, and Guzman Y Gomez shares
• These are the 10 most shorted ASX shares

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.