2 top ASX shares to buy and hold for the next decade
I think the best way for Australians to invest in ASX shares is for the long term, hopefully for a decade or more.
Owning good investments for a long time is a compelling prospect when the power of compounding enables the investment to become much larger in the future.
If revenue or profit is growing by an average of 10% per year, then it doubles in less than eight years. Ultimately, that could unlock share price returns of 10% per year and more than doubling in less than eight years.
We'd need a crystal ball to know for sure which investments will perform. But, in terms of investments, I'm optimistic about the below ones to deliver significant earnings growth in the next decade.
Guzman Y Gomez Ltd (ASX: GYG)
GYG is a Mexican restaurant business with many locations having a drive-through option for consumers.
I'm optimistic that the business can continue to deliver a pleasing restaurant rollout in the coming years with a mix of corporate-owned and franchise operations.
In the company's FY27 first-quarter update, which it reported on 9 October 2026 and showed the performance for the three months to 30 September 2026, the business reported that its Australian network increased by 13.7% year over year to 258 locations, and its Asian network grew by 3.7% year over year to 28 (23 in Singapore and five in Japan).
Within the next 20 years, the business aims to reach 1,000 Australian locations. That would be an increase of 287% in Australia alone from the September 2026 total, which would come with scale benefits. The business expects to open 35 new restaurants in Australia during FY27.
Another growth factor for the business is the comparable sales growth of its existing restaurants. In that FY27 first quarter, GYG reported year-over-year comparable sales growth of 7.1% across Australia, Japan, and Singapore.
Through the combination of comparable sales growth and network expansion, network sales grew by 18.8% to $387.5 million. That's significantly better than 10% growth.
Profit margins are increasing, which suggests the company's earnings can grow even faster than its impressive network sales growth.
It expects its underlying EBITDA (operating profit) as a percentage of network sales to increase to between 6.7% and 6.9%, up from 6.2% in FY26. I expect this profit margin to rise towards 10% in the coming years.
I think the ASX share will become significantly larger and more profitable in a decade from now. I think international growth could be material in the 2030s.
Global X S&P World Ex Australia Garp ETF (ASX: GARP)
The other investment I want to highlight is an exchange-traded fund (ETF).
I'm calling this investment an ASX share because it's about investing in shares and we can buy it on the ASX.
The idea of the fund is that it invests in some of the most compelling global stocks using a 'growth at a reasonable price' strategy.
It looks to find businesses growing their revenue and earnings at a good pace, while also being compelling value in terms of the price-to-earnings (P/E) ratio.
On top of that, the fund wants to see that these businesses have low debt levels and a high return on equity (ROE). This shows they're not taking big risks to deliver growth and the businesses are highly profitable for how much actual shareholder money is invested within the company.
Utilising that strategy, it has put together a portfolio of 250 high-quality, attractively priced businesses across a range of countries and sectors, making it pleasingly diversified.
Past performance is not a guarantee of future performance, but since the GARP ETF's inception in September 2024, it has returned an average of 15.8% per year. I think it's capable of comfortably outperforming the S&P/ASX 200 Index (ASX: XJO) over the next decade thanks to its investment strategy, which I think should always be a rewarding long-term strategy.
The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.
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.
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