Shares - ASX

 

 Propel Funeral Partners Ltd (ASX: PFP)

 

Propel is the second largest funeral operator in Australia and New Zealand. As morbid as it sounds, I think there are three key reasons to like the business.

Firstly, I'd say it has very defensive earnings. Sadly, there is a certain volume of funerals that occur each year. Plus, the price of funerals is generally rising alongside inflation, so the company has a solid organic tailwind for its top line and bottom line.

The main reason why I think it's a great long-term buy is the fact that it's exposed to the tailwind of rising projected deaths. Propel says that death volumes are expected to increase by 2.8% per year between 2025 to 2035 and then grow by another 2.4% per year between 2036 to 2045. While there may be slight variances to the growth rate some years, there are clear tailwinds for the business.

Over the long-term, I'm expecting the ASX share's operating profit margins to rise over time thanks to operating leverage.

 

2 ASX shares to buy and hold for the next decade