2 leading ASX 200 shares to buy for growth and income

These 2 leading S&P/ASX 200 Index (ASX:XJO) shares could be top picks for growth and income, such as Magellan Financial Group Ltd (ASX:MFG).

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I think there are a number of leading S&P/ASX 200 Index (ASX: XJO) shares that are worth buying for growth and income.

Businesses in the ASX 200 have already been growing for years. I think these companies could be worth buying for their growth credentials as well as the income they currently provide:

Brickworks Limited (ASX: BKW)

Brickworks is one of my favourite ASX 200 shares. The Brickworks share price has done well in recent times. It has gone up 11.7% over the past month and 48% over the past six months.

The construction company may benefit from a number of positives in Australia. The country is almost entirely in control of COVID-19, helping the economy. A number of measures announced by the government in recent months should help first home buyers purchase newly-built properties, driving up construction demand. It is supposedly about to get a little easier for borrowers to get access to money. There is serious talk of another slight interest rate cut by the RBA. All of these measures may help Brickworks in Australia.

The ASX 200 share recently acquired some brick businesses in the USA. That is a long-term growth market for the company because the population on the eastern side of the US is so much larger than Australia's entire population. The American economy has more work to do to recover from COVID-19, but I believe Brickworks can boost its margins and efficiency there.

I'm also confident about Brickworks' other assets. Its large shareholding of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) continues to do well. Indeed, the Soul Patts share price just reached a 52-week high, it has risen 41% over the past six months.

I really like Brickworks' 50% stake in an industrial property trust. The other joint venture partner is ASX 200 share Goodman Group (ASX: GMG). Industrial property is in higher demand since the onset of COVID-19. Both Coles Group Limited (ASX: COL) and Amazon want large, high-tech distribution warehouses built on land owned by the trust. After those warehouses are built, it should boost the gross assets of the trust to above $3 billion.

At the current Brickworks share price it offers a grossed-up dividend yield of 4.2%.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is one of the best fund managers in Australia in my opinion. Its main focus is on international shares, though it also has very sizeable funds that invest in global infrastructure and Australian shares.

The ASX 200 share is organically growing its funds under management (FUM) from investment performance and net inflows. In September 2020 it reached $102 billion of FUM.

I like that Magellan is always looking for new ways to diversify profit and serve clients. Magellan recently announced it was going to take a 40% economic stake in Barrenjoey, a new investment bank which will have highly capable people involved.

The fund manager is also working on launching a retirement product which could be attractive considering the long-term growth of the superannuation pool thanks to mandatory contributions and the tax-advantaged status of super.

Magellan also plans to launch a set of lower-costing exchange-traded funds (ETFs) which may be attractive for investors looking for lower fees. Hopefully this attracts a wider group of investors, rather than cannibalising its own FUM.

At the current Magellan share price the ASX 200 share is trading at 20x FY23's estimated earnings with a trailing grossed-up dividend yield of 4.9%.

Foolish takeaway

These are two of the best ASX 200 shares that can provide a good mix of income and growth in my opinion. However, they have both run hard in recent weeks. So I'd be inclined to wait a little bit before buying shares.

I'm looking at other share opportunities at the moment for my own portfolio.

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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