The Timeless Titans: ASX Stocks That Have Weathered Centuries
As the sun rose over Sydney Harbour in 1817, a small group of merchants gathered in a modest building on George Street.
Little did they know that the institution they were founding – the Bank of New South Wales – would evolve into a financial powerhouse that would still be thriving over two centuries later.
This is the story of Westpac and other enduring Australian companies that have stood the test of time, adapting and growing through wars, depressions, and technological revolutions.
While investors often chase the latest trends, from artificial intelligence to cryptocurrencies, there's profound value in examining businesses with proven longevity.
These companies have not only survived but thrived, demonstrating resilience and adaptability that newer enterprises have yet to prove.
The Lindy Effect: A Framework for Longevity
The Lindy Effect, a concept popularised by statistician Nassim Taleb, suggests that the future life expectancy of non-perishable things like technologies or companies is proportional to their current age.
In other words, every additional period of survival implies a longer remaining life expectancy.
This theory aligns with the historical performance of long-lasting ASX-listed companies.
For instance, a study by Credit Suisse found that Australian stocks have delivered an annualised real return of 6.8% since 1900, outperforming most global markets.
Many of the companies contributing to this impressive long-term performance are those that have been operating for decades or even centuries.
The Oldest Giants of the ASX
Westpac Banking Corp (WBC) - Founded 1817
?? - Australia's oldest bank, with over 200 years of history
?? - Manages over AUD 907 billion in assets as of 2023
?? - Survived the 1893 banking crisis, when 13 of the 22 banks in Australia failed
AGL Energy Ltd (AGL) - Founded 1837
?? - Australia's largest electricity generator, producing about 20% of the National Electricity Market's power
?? - Has paid dividends for over 100 consecutive years
?? - Currently transitioning towards renewable energy, with plans to invest $20 billion in renewable and firming capacity by 2036
ANZ Group Holdings Ltd (ANZ) - Founded 1835
?? - Operates in 32 markets globally
?? - Manages over AUD 1 trillion in assets
?? - First Australian bank to introduce ATMs in 1977 [10]
BHP Group Ltd (BHP) - Founded 1885
?? - World's largest mining company by market capitalization (AUD 235 billion as of 2023)
?? - Produced 231 million tonnes of iron ore in FY2022
?? - Has paid out over $65 billion in dividends over the past decade
Washington H Soul Pattinson & Co Ltd (SOL) - Founded 1872
?? - Australia's second-oldest publicly listed company
?? - Has increased its dividend every year for the past 20 years
?? - Investment portfolio spans pharmaceuticals, telecommunications, mining, and more
Unique Insights: Beyond the Balance Sheet
While financial metrics are crucial, understanding these companies' cultural and historical significance provides deeper insights:
Equity Trustees (EQT) - Founded 1888
?? - Has had former Prime Ministers Robert Menzies and Stanley Bruce on its board
?? - Manages over $150 billion in funds, highlighting its transition from a niche estate planning service to a major player in superannuation trusteeship [15]
Australian Foundation Investment Company (AFI) - Founded 1928
?? - Survived the Great Depression within its first year of operation
?? - Has increased dividends in 52 of the last 57 years [16]
Whitefield Industrials Ltd (WHF) - Founded 1923
?? - Uniquely focuses on industrial companies, excluding resources
?? - Adapted its strategy during the Great Depression and World War II, pivoting from mortgages to industrial investments
Rio Tinto Ltd (RIO) - Founded 1873
?? - Originally started operations in Spain before becoming a global mining giant
?? - Invested $3.1 billion in exploration and evaluation over the past five years
The Resilience Factor
These enduring companies share common traits that have contributed to their longevity:
1. Adaptability: All have pivoted their business models multiple times to stay relevant.
2. Financial Prudence: Most have maintained strong balance sheets and consistent dividend policies.
3. Innovation: Many have been at the forefront of technological adoption in their respective industries.
4. Cultural Strength: Long-standing corporate cultures have helped navigate challenges and maintain consistency.
While past performance doesn't guarantee future success, the Lindy Effect suggests that these time-tested ASX stocks may continue to thrive.
For investors seeking stability and proven track records, these centenarian companies offer compelling cases for consideration.
As we look to the future, these enduring giants remind us that in the world of investing, sometimes the oldest trees bear the sweetest fruit.
At Parkside InvestorPlus, we don’t gamble with your future, rather, we trust in what has worked best in the long run.
For a no obligation consultation, contact us at (02) 9899 4899