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ASX: stocks to watch for long-term investors


MongiIG

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For long-term investors, the fluctuation in the market during a short period doesn’t worry them as stability and ongoing passive income are often viewed as key to their financial goal.

1663644363197.jpgSource: Bloomberg
 
Hebe Chen | Market Analyst, Melbourne | Publication date: Tuesday 20 September 2022 

Here we look at three ASX-200 company's known for providing long-term financial results for their shareholders.

  • Washington H. Soul Pattinson and Co

Washington H Soul Pattinson & Co Ltd (WHSP) started as a chemist shop in Sydney, in 1872 and in that time has become Australia's second oldest ASX-listed company.

WHSP continues to be a solid powerhouse for many long-term investors due to the company having a proven track record delivering outstanding return. Moreover, WHSP has consistently paid dividends every year since going public in 1903.

Over the past 15 years, WHSP's return rate is at an of 11.5% per annual gain while also paying special dividends in eight of the last ten years.

As stated on its website, WHSP encompasses "many industries including its traditional field of pharmaceuticals, as well as mining, building materials, property investment, telecommunications, financial services and other equity investments."

Today the company's share portfolio includes rising star New Hope Corp Ltd (59.7% owned by WHSP), Brickworks Ltd (44.5% owned by WHSP), and TPG Telecom Limited (26.9% owned by WHSP). More established companies include BHP Group Limited, Commonwealth Bank of Australia, and Telstra Corp Ltd..

The WHSP share price has experienced a difficult 12 months. While the price tried to rebound from the June low by more than 20%, it continues to still be more than 36% lower than the September 2021 level.

Having oscillated around the narrow band between $25.3 to $26.6 for more than ten weeks, the price is looking for a breakout to confirm the next chapter and if the level of $26.77 can be successfully overcome, buyers could expect the price to move towards the April high near $28.

On the flip side, the $24.8 support will be a key watch if the bearish sentiment for the stock stays in charge.

Washington H. Soul Pattinson and Company Limited daily chart

1663644363123.jpgSource: IG
  • BHP Group Limited

BHP is the biggest ASX 200-listed company with $128.92 billion in market capital. Outside of Australia’s border, it is also one of the world’s largest miners, with a collection of top-class operations across a range of highly sought-after commodities, including coal, copper, iron ore, and nickel.

For the past decade, the company has delivered a steady improvement in both revenue and margin and during the last financial year, achieved a record EBITDA of US$40.6 billion at a record margin of 65%.

1663644363132.JPGSource: CommSec

The BHP share price peaked in mid-April this year thanks to sky-high iron ore prices. Despite recently being dragged down, the price increased by two percent while the ASX 200 had a loss of seven percent over the past 12 months.

Based on the daily chart, the price is pulling back from the gap between $39.1 to $40.2 which should be viewed as the major mid-term hurdle for buyers even if the price succeeds in breaking through the 50-day MA at $38.7. On the flip side, $37.5 will be the imminent support level before the price falls to the floor level in July.

BHP Group Limited daily chart

1663644363141.JPGSource: IG
  • National Australia Bank

Listed in 1962, the National Australia Bank is the ASX's oldest listed bank, having been in operation for almost 160 years.

Over the last five months, the RBA has been quickly increasing its cash interest rate thus drawing attention to the banking sector and although banks benefit from the higher net interest margins, their loan sectors are under pressure from the shrinking property market.

Even so, the bank is committed to garnering a generous return for its shareholders as usual. For FY22, NAB expects a gross dividend yield of 7.1%, with the FY23 gross dividend yield predicted to be 8.75%.

NAB’s share price has outperformed the ASX in the last 12 months, up ten percent while the ASX retreated. According to the daily chart, the price has been skewed in a downward trajectory since August 19th, 2022.

For the long buyers, the next challenge level to be cautious about is the 76.4% Fibonacci retreatment level, which sits around $29.9 while the sellers might focus on the $29.0 level if a near-term pullback occurs.

National Australia Bank daily chart

1663644363150.JPGSource: IG

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